Passive Appreciation Marital Property In Florida
In Kaaa v. Kaaa, 9 So. 3d 756, (Fla. Dist. Ct. App. 2d Dist., 2009), the Second District noted that "marital funds were the source of virtually all of the monies used to service the mortgages on the property and the various expenses associated with it." Kaaa, 9 So. 3d at 759.
The district court said:
The Wife [Kaaa] would be entitled to equitable distribution of a share of substantially all of the passive appreciation in the Riverview property during the course of the parties' twenty-seven-year marriage.
However the Wife is not entitled to any portion of the considerable passive appreciation in the value of the property. Kaaa, 9 So. 3d at 759.
While the trial court and district court correctly concluded that the Kaaas' marital home is nonmarital real property, the value of the passive appreciation of the property that accrued during the marriage is a marital asset because:
(1) the value of the home appreciated during the marriage while marital funds were being used to pay the mortgage;
(2) Kaaa made contributions to the home. Because paying the mortgage is a prerequisite to enjoying the appreciation in value of the marital home,
The Court conclude that principles of equity do not allow an owner spouse to receive the full benefit of the passive appreciation when the non-owner spouse contributed to the property, and marital funds were used to pay the mortgage.
Such inequities must be balanced by the trial court making specific factual findings regarding the contributions of the non-owner spouse and the relationship of those contributions to the passive appreciation of the property.