Pennsylvania Property Division: Determining Fair Rental Value
According to the Pennsylvania Fair Rental Value law, in general, when two people are divorcing and one party is wholly excluded from the marital residence, the party who moved out may be entitled to a credit for the fair rental value of jointly held marital property against the party who remains in the home.
The rental credit is based upon, and therefore limited by, the extent of the dispossessed party’s interest in the property.
The rental value is limited to the period of time during which a party is dispossessed and the other party is in actual or constructive possession of the property.
The party in possession of the property is entitled to a credit against the rental value for payments made to maintain the property on behalf of the dispossessed spouse.
Generally, in regard to the former marital residence, payments made on behalf of the dispossessed spouse will be one-half of the expenses including debt service on the property. This is because equity places a presumption upon the dispossessed spouse of responsibility for expenses to the extent of her/his ownership interest, which is generally one-half.
Whether the rental credit is due, and the amount thereof, is within the sound discretion of the court of common pleas when it comes to diving property.
Will A Pennsylvania Count Grant Rental Credit?
The trial court has considerable discretion when determining whether to grant rental value as a part of equitable distribution.
The basis of the award of rental value is that the party out of possession of jointly owned property (generally, the party that has moved out of the former marital residence) is entitled to compensation for his/her interest in the property, and that one-half of the fair rental credit may be awarded to the dispossessed party.
Pennsylvania courts seem to be concerned with fairness when determining whether to award a rental credit. The courts have emphasized that awarding half of the rental value is not mandatory, and that they are more concerned with the total distributary scheme being equitable.
The court notes that an equitable distribution scheme may include an award of one-half of the rental value of the marital residence when possessed exclusively by the other spouse during separation, minus deductions from rental value for the non-possessing spouse’s share of expenses related to preserving the marital residence (i.e., mortgage, insurance, taxes, maintenance), and that the award of rental value is within the discretion of the trial court.
Trial courts have vast discretion in determining whether to award a party fair rental value. Courts seem to be primarily concerned with fairness when deciding whether they will award rental value.
Although it is not an enumerated factor to consider, courts do appear to consider whether the dispossessed party is required to pay rent during the time they were displaced from the marital residence when making this determination.
Pittsburgh and Philadelphia Family Law Attorneys
If you are a man facing divorce in Pennsylvania, please consult with a divorce lawyer in your jurisdiction to ensure your rights are protected.
Cordell & Cordell has offices and family law attorneys located in Philadelphia, Pittsburgh, and Radnor should you seek additional information or possible legal representation.