Fair Rental Value

The issue of fair rental value arises where one spouse is no longer living in the marital residence pending finalization of a divorce action. The principle behind fair rental value is that the spouse that has moved out of the former marital residence still has a ½ interest in the property and accordingly, should be compensated for their interest. The court must consider a number of items in reaching an appropriate calculation of any rental credit due. First, the court must determine if there are any equitable defenses that should offset the total of any rental credit due. Second, the court must consider the length of the dispossession. Case law also establishes that the other spouse must be in actual possession of the home.

Finally, the court must calculate the total amount of credit for expenses paid on the home. These expenses would include the mortgage payments and other ordinary expenses related to the home. Similar to any rental credit due, expenses should be split in half to reflect each party’s ownership interest. If the rental value exceeds the expenses related to the home, the spouse that has left the home should get a credit for ½ of the rental value offset by the expenses. An argument for fair rental value is most likely to occur where the home is owned outright such that no mortgage payments are made or there are relatively small monthly payments on any debt associated with the house compared to what the home could rent for.

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