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WHAT HAPPENS TO A CO-OWNED RENTAL PROPERTY IN A DIVORCE? Any divorce comes with challenges. For couples who own rental properties, it adds an extra layer of complexity. Understanding what happens to such assets is important for individuals navigating this difficult terrain. Selling the rental property One option is to sell the property, which is relatively straightforward. The sale proceeds get divided between the spouses according to their ownership percentage. This allows for a clean break, ensuring both parties can move forward independently. Buyout option In some cases, one spouse may wish to keep the rental property. If this happens, the spouse retaining the property compensates the other for their share, ensuring an equitable distribution of assets. Determining ownership percentage the ownership percentage is usually based on the initial agreement or the court’s decision. If both spouses contributed equally to the purchase, their ownership might result in a 50-50. However, if contributions were uneven, the court may adjust ownership percentages accordingly. Consideration of rental income Rental properties generate income. During divorce proceedings, the court may factor in the rental income when determining the value of the property or deciding on a fair buyout amount. When the separation involves additional property, understanding the process can help both parties navigate this challenging situation with clarity and ensure a fair distribution of assets.