Dividing assets during your divorce can feel like picking through a pile of memories. You both made a commitment to each other and carried out your lives together, acquiring assets in the process, as if you would never have to get to this point.
The most contentious issue in the division of assets is generally going to be the home in which you both lived. In some cases, this property was acquired prior to your relationship or marriage and will be considered “separate property.” California is a community property state, meaning all assets acquired during your marriage are considered to be owned equally by both spouses. Some California laws, however, provide the ability for one spouse to make a claim against “separate” property.
Family Code 2640 is one such law in cases where one party doesn’t have an official ownership claim to property but made “contributions to the acquisition of property.” If you don’t personally own the home and aren’t on the title, you may still have a claim for the home or at least reimbursement for your contributions.
What is Family Code 2640?
Family Code 2640 deals with reimbursements related to the property during a divorce. Specifically, the code provides the ability for a party to claim reimbursements for contributions toward a property such as a downpayment, payments for improvements, and payments that “reduce the principal of a loan used to finance the purchase or improvement of the property.”
Note that the last portion excludes payments that were made toward the interest on a loan. Payments for simple maintenance, insurance, and taxation are also excluded. If you have signed a waiver of the right to reimbursement you will also not be able to file a claim under Code 2640.
How Will I Be Reimbursed?
If you decide to pursue a claim under California Family Code 2640, you can be reimbursed for the equal dollar value of all qualifying contributions. For example, if you put $10,000 into the down payment of the home and then added in an additional $100,000 over time for upgrades and payments to the mortgage then you will have $110,000 of qualifying contributions.
Even if the value of the home has changed, your eligibility for reimbursement will remain unchanged. You can only claim the actual payments made without interest or adjustment over time.
It’s likely that the reimbursement will come in the form of other assets during your divorce case, but those assets must have a cumulative value equal to your qualifying contributions. The reimbursement total cannot exceed the net value of the property being considered for division, however, so you may not get the full value returned if there aren’t enough assets to transfer to cover the difference.
There are certain exceptions that prevent Family Code 2640 from being applicable in all cases. It’s important to work with a law firm that has experience handling cases just like this. At KL Family Law, we help families move forward with compassion and integrity. We understand the complexities of these laws and can guide you through them during your divorce.
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