Overview of Kelly Credits


The topic of whether Kelly credits should be awarded normally arises after dissolution of marriage has been entered and one party has been given exclusive use and possession of the marital home. Usually, the party retaining possession of the home also retains majority timesharing of any minor children of the parties. Normally, the exclusive use and possession is conditioned on some future event, such as the minor child reaching the age of 18 or the remarriage of the party in possession. At the time the condition is reached, the house is to be sold and the proceeds are divided between the parties. The question that arises is: What amount, if any, should be given to the party retaining possession for the upkeep and payments for the house while in possession?

The method for distributing marital home proceeds when one party has been given exclusive possession by court order was described in Kelly v. Kelly. 583 So. 2d 667 (Fla. 1991). The issue in Kelly was that the trial court did not address mortgage payments in the final order which did address property taxes and insurance. The exclusive use and possession of the home was given to the wife until the minor child turned 18. Id. at 667. Once the child reached the age of majority, the wife demanded reimbursement for the maintenance of the home during her time of possession. Reimbursement was to be taken out of husband’s half of the sale proceeds. The husband countered by asking for one-half of the reasonable rental value during the wife’s exclusive possession. After two appeals, the Supreme Court of Florida made the following determination. The wife was allowed to collect half of the full portion of the mortgage payments made during her time of exclusive possession, not only for the amount of principal reduced. Id. at 668. This means that the husband is also required to pay for one half of the interest payments made during the time of the wife’s exclusive possession as well as one half of the costs of any repairs and maintenance made during this time. The Supreme Court of Florida also denied the husband’s claim for one-half of the reasonable rental value of the home during the time of the wife’s possession. Id.  The wife successfully argued that the original court order granted the wife exclusive possession; since the husband had no right to possession during that time, he had no right to the rental value that might have been accrued. Id. If such person is ousted by a court order following marriage dissolution, and no reimbursement for rental value is provided in that judgment, it is assumed that the trial judge intended that there be none. Id. Recently though, trial courts are being cautioned to expressly state that they have considered the issue of reasonable rental value and should state that no offset is warranted. Wolf v. Wolf, 979 So. 2d 1123, 1127 (Fla. 2d DCA 2008). Thus, the issue must, at least, be considered during the dissolution proceeding and found to be unwarranted.

The court in Kelly agreed with the reasoning used in Brandt v. Brandt. 525 So. 2d 1017 (Fla. 4th DCA 1988).  The Brandt court relied on the Florida statutes addressing the dissolution of a tenancy by entirety through divorce. Brandt, 525 So. 2d at 1019 (1988). Upon dissolution of marriage the tenants of an estate by the entirety become tenants in common. Fla. Stat. §689.15.  Once a tenancy in common has been established, all owners contribute equally to the maintenance of the ownership interest in the property. Id. A cotenant is only entitled to an accounting for rental value if there has been an adverse  possession, ouster, or the equivalent. Barrow v. Barrow, 527 So.2d 1373, 1376 (Fla. 1988). Thus, if exclusive has been granted through a court order, it cannot be said to be adverse and therefore, reasonable rental value cannot be granted.  The court in McCarthy v. McCarthy followed the same reasoning in finding that the exclusive use given to the party while minor children are present in the marital home serves the best interest of the children and bars rental value being granted. McCarthy, 922 So. 2d 223 (Fla. 3d DCA 2006). This holds true unless specifically stated by the court in dissolution judgment. Duncan v. Duncan, 379 So. 2d 949 (Fla. 1980).

Once dissolution of marriage has been finalized, the parties own the marital home as a tenancy in common and thus, both parties are required to contribute to the necessary payments of the property. This includes mortgage payments, taxes, and repairs and maintenance. The party without ownership is not entitled to an offset of reasonable rental value because a court order of exclusive possession deprives the party without exclusive possession to his or her interest in the property. Of course, the parties must comply with any conditions of the exclusive possession ordered by the court. Rental value may be given to the non-possessing party if the party with possession stays in possession after the condition of exclusive possession has been met. The amount of the Kelly credit is the half the amount of the full amount paid for the payment and upkeep of the home during the time of exclusive possession if the possession is not adverse or is court ordered. This amount is taken out of the non-possessive parties share of the proceeds following the sale of the home and may not be reduced by the fair rental value of the home during the time of exclusive possession. The court is also authorized to consider any other support such as child support or alimony provided by the non-possessive party in awarding any credits upon sale of home. Fla. Stat. § 61.077.

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