Will a divorce court judge give a wife the first right to purchase the former marital residence in equitable distribution in Virginia?
Yes, in the case of Trujillo v. Trujillo, CL07-525, the Circuit Court of Salem City allowed the wife the first right of purchase of the former marital residence in equitable distribution because it had been her childhood home that the couple purchased from her mother.
The husband and wife were married for nearly ten years before separating. They had one minor child at the time of the divorce, whose custody and visitation had previously been decided. At the time of the separation, the husband obtained an ex parte injunction removing the wife from the marital residence due to her drug addiction, abuse, and death threats to her husband. The husband had been awarded primary physical custody of their son with reasonable supervised visitation rights to the mother. At trial, the divorce court judge noted wife’s extraordinary recovery from her addiction, allowed her unsupervised visitation, and transferred further proceedings to the Juvenile and Domestic Relations District Court.
At issue in equitable distribution were two houses owned by the parties, the former marital residence which was the wife’s childhood home and a rental property next door titled in husband’s name alone with a mortgage loan in both husband and wife’s names. The wife claimed a separate interest in the marital home, alleged that she had bought the house from her mother six years prior to her marriage for $45,000.00, along with extra money “under the table”. Moreover, wife testified that she had paid $22,910.58 on the purchase money debt before she and the husband refinanced it in 2002, at which time the mother deeded it to the parties as tenants by the entireties.
The wife’s testimony was contradicted by her mother, who testified that the wife had not bought the house, but had entered into a rent-to-own contract. The mother denied that she had received any “under-the-table payments.” Under the contract between the mother and the wife, the deed would have been delivered upon final payment of the note. Instead, the husband and wife chose to purchase the home from the mother before the rent-to-own contract matured. The judge held that purchase converted all of the wife’s former payments into rent under the terms of the former contract, with no bearing on equitable distribution. Later, the couple refinanced the original purchase money mortgage for home improvements and the construction of a garage. The parties also borrowed money on the husband’s credit card to finish the garage, resulting in a judgment against the husband which the court found to be marital debt.
The second property, the rental home, was purchased during the marriage but it was titled in the husband’s name alone. The court found that the husband purchased the home, which the parties later refinanced for $65,000.00. The couple had rented the home for $670.00 per month, while the monthly note payment totaled $557.00 per month, leaving them a net profit of $113.00 per month before repairs and maintenance. The husband had kept all the rental payments after the parties separated.
To determine equitable distribution, the Court weighed the testimony of the parties, their experts, and the witnesses. Applying Virginia Code §20-107.3, the court noted that since equitable distribution can only be made on jointly held property, the rental property home did not fall under the terms of Virginia Code §20-107.3(c). Therefore, the Court held that the husband should retain ownership of that property. Upon presentation of the evidence on the marital residence, the City of Salem Circuit Court concluded that the wife made a deliberate choice not to complete the rent-to-own contract, which, according to the terms of the contract, converted all of her former payments into rental payments. Since the parties bought the property jointly, the debt was marital debt. The Court also noted that the $11,215.36 borrowed on the husband’s credit cards, since it was used for marital purposes, was to become a lien on the husband’s one-half undivided interest upon entry of the divorce decree.
The Court held that the value of the residence should be based on the husband’s appraised values, because that appraisal considered the interior as well as the exterior of the home. Therefore, the court found that the value of the marital residence was $80,300.00. Both parties wanted to purchase the home. The divorce court judge gave the wife the first right of purchase because it was her childhood home, she tried to purchase it, and the parties bought it from her mother. The wife was given the first right to purchase provided she refinanced the loans on the property and removed husband’s liabilities on the property within 90 days. If the wife failed to purchase the property within 90 days, then husband would have the same right to purchase under the same terms. If neither party purchased the home, then the house would be sold, and the proceeds would be split equally between the parties, with the debts to be paid and divided upon the sale.
You should consult with your Virginia divorce lawyer concerning your prospects for retaining the former marital residence in equitable distribution.