Often, people are married and own real estate properties. In a recent case I represented, for example, the wife stayed in the residence but moved somewhere very inexpensive. Let’s say the property is worth $2 million and the couple is still paying the mortgage. Let's also assume the husband is the main person earning money and wife is a stay-at-home mom, meaning she stays in the property and then husband pays for the mortgage payments.
‘What's claim’ is based on the What's case from 1985 by California Court Of Appeal and says that the husband in the above example may be reimbursed. Assuming the husband had been paying the mortgage from community property money and that the two had been married for 20 years that payment is reimbursable under ‘What's Claim.’ This means if the mortgage payment was $5,000 or $10,000 every month that payment has to be credited to the community. When I say credited to community I mean that half of it is still the wives' money. The mortgage payments the husband made is credited to the community property, so, to the whole pool, and will be divided 50/50 accordingly.
In a different example, let’s say the mortgage payment is $5,000 but the whole rental value of the property is $20,000 a month. In that case, the reimbursement would be offset. I will read exactly what my book says here. It's a little bit tricky. "When the mortgage payments are made by the party occupying the residence." Let's say in our case the wife would be paying the mortgage payments, "A claim by the other party for reimbursement ‘for the value of the use’may ’only to offset a claim’ by the occupying party ‘for reimbursement for the payment.’ and net gain for the party ‘claiming reimbursement for the value of the use’in such circumstances will be likely ‘only when the value of the use is substantially greater’ than the amount of the payments." Huh? It sounds very complicated, but I will translate. Assuming the wife is staying in the residency and the husband claims reimbursement for the value of the use, the mortgage payments can only be offset if the value of the use is $5,000 and the mortgage payment is $5,000. In that case, there would be no reimbursement. If, for example, the mortgage payment is $5,000 and she pays this $5,000, that's fine, no reimbursement. But then if the value of the use is $10,000 then the remaining balance is community property balance, the extra $5,000. Now, the net gain for the party claiming reimbursement, so for the husband who says that there is a net gain, for the value of the use in such circumstances will be likely only when the value of the use is substantially greater than the amount of the payments. So, this means, if for example, the mortgage payment is $5000 and the wife stays in the property and pays $5,000, but the value of the use is $5,200, then the reimbursement has to be substantially greater. A perfect example would be that $10,000 is the actual value of the use.
In cases like this where I know one spouse stays in the property and another spouse is moving out and still pays the mortgage or is not paying for the mortgage payments but the spouse is staying in the home and the value of the house’s use is higher, for example, in cases where the property is paid off and the wife just stays in the property then the community has a What's Claim for the value of the use which could be a substantial amount of money every month. In that case, I file a What's Claim notice to the other party saying, "Look, you're using this and that means we get to have the community credit that amount every month for the purposes of the division leader.” Divorces can take about nine or 10 months and there can be significant amounts of property involved. If the other side is using it and I don't give the "What's notice” then it could be a loss of $90,000 in 10 months. Even more so, if there are two properties and the wife is using two properties it could be $180,000 that can be credited to the other spouse.
Share this Post