How is a pre-marital mortgage divided when spouses divorce?

Property of each spouse

Property that belonged to each spouse before marriage is individual property and cannot be divided.

Let's look at the example of real estate. The spouse purchased an apartment before marriage and paid a deposit for it, but did not pay in full: in this case, it can be assumed that the property will be common property in terms of paying for the apartment from the family budget. But if the apartment was paid for before marriage, then the wife will not be able to claim it (except in cases where improvements have been made and part of the apartment is recognized as common property by a court decision).

What rights does the “other half” have if the apartment was purchased with a mortgage before marriage?

- Drink juice, dear! And then we’ll think about the mortgage.

You wrote about the problems of dividing housing purchased with a mortgage during marriage (see “Your House” for August 19 this year).

I bought an apartment on credit two months ago, and now I’m planning to get married. I’ll be paying off the mortgage while married, and I’m wondering: will my spouse get the right to part of the housing?

Igor.

“The issue is resolved ambiguously: if it comes to divorce and (or) division of property, then everything will depend on the skill of the lawyers of the ex-husband and wife, since the laws have arguments in favor of each of the spouses,” explains our permanent expert, chairman of the bar association "Pavlovich and partners" Oleg PAVLOVICH.

To help you get your bearings, we will provide both provisions of the legislation.

1. What can a spouse claim for part of the housing purchased by the “other half” before marriage under a mortgage:

— According to the Family Code, property acquired by a husband and wife during marriage is their joint property. The law also includes the earnings and other income of either spouse as common property.

Thus, it turns out: when paying off the mortgage loan during the marriage, the spouse spends common funds, and the “other half” also has a share in the contribution to the apartment.

Based on this, it is possible, on the one hand, to demand the return of part of such a deposit, i.e. payment of half the amount of money paid for the apartment after the marriage.

On the other hand, notes Oleg Pavlovich, you can try to apply the approach that is used when dividing property acquired in an unregistered, civil marriage. In this case, the spouse, referring to his contribution to the property registered in the “second half”, demands to allocate a share in the ownership right in proportion to his part of the invested funds. The possibility of such a division is stated in the Resolution of the Plenum of the Supreme Court of the Russian Federation dated April 25, 1995 No. 6.

2. How to argue your position to a spouse who took out a mortgage before marriage in order to keep the apartment:

— According to the Civil Code, the right of ownership of real estate, including housing, arises from the moment of state registration of such right. Since the apartment was purchased with a mortgage and registered ownership before the wedding, it clearly refers to the property that belonged to the spouse before marriage. And it, as you know, is personal property and is not subject to division (Article 36 of the Family Code).

You can also raise the question that the “other half” claiming to contribute to the apartment after marriage still needs to prove what exact funds were used to pay off the loan: was it the spouse’s earnings or, perhaps, his personal pre-marital savings, money received as a gift or by inheritance, etc. The nuance is that premarital savings and amounts received free of charge during the marriage do not count as general income and remain the personal property of the paying spouse. In this case, you cannot apply for joint investments in paying for an apartment loan.

How to recognize property as common

The legislator allows the possibility of recognizing the individual property of spouses as common property. To do this, the interested party needs to go to court, pay a state fee and provide compelling evidence that improvements have been made to the property that in one way or another increased its value.

For example, if the spouses’ funds were spent on renovating an apartment or paying off a mortgage loan, it is necessary to prove the source of these funds and their relevance to the family budget. Moreover, property improvements must be inseparable, that is, they cannot be taken away and moved to another place.

How to divide an apartment purchased with a mortgage before marriage

When the last point is impossible, then you should prepare for surprises. Although lawyers focus on signing a marriage contract. In the CIS countries, such agreements are rare, but in Europe or the USA, every second couple enters into agreements.

Divorce proceedings never go without consequences, the main one of which is the division of real estate. The issue is quite acute, since each spouse has to prove the existence of their property share. And if you cannot resolve the issue amicably, then you should go to court.

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Let's go to court

Which court should I go to?

• in the world court at the place of residence of the defendant (if the amount of the claim is up to 50,000 rubles);
• to the district office at the defendant’s place of residence (if the amount of the claim is more than 50,000 rubles).

If the defendant’s place of residence is unknown, it is necessary to apply to the court at the place of his last registration in the Russian Federation.
When there is no information about it, the claim is filed at the location of the real estate/most of the movable property. The amount of the state fee depends on the amount of the claim.

What evidence can you use?

• payment documents;
• contracts;
• witness's testimonies.

Legal conflict

Photo: https://pixabay.com/photos/hammer-horizontal-court-justice-802301/
Consider an example: a woman took out a mortgage and got married. Even before going to the registry office, she registered ownership of the living space. And we can assume that this apartment belongs entirely to her. But not everything is so simple, because the mortgage is not paid off immediately, but over many years.

Let's assume that the apartment cost 3 million rubles. The woman contributed 1 million as a down payment and entered into a loan agreement for 2 million rubles. After marriage, the married couple paid this amount and interest for 7 years. And now, the last payment has been made, but then the husband files for divorce and division of jointly acquired property. That is, a mortgaged apartment. The reason is that he took part in paying off the loan.

Since a woman received the right of ownership of housing before marriage, square meters cannot be joint property and cannot be divided. But 2 million rubles that were paid during the marriage period are already considered common property. This means that the ex-husband, according to the RF IC, can lay claim to his half. As a result: most likely, the court will side with the husband and oblige the woman to pay him 1 million rubles (plus interest on the loan).

The judge may reject the ex-husband's claim if the spouse proves that he did not receive income and, as a result, did not participate in the payment of the mortgage loan. However, here it is necessary to prove that the man did this for unjustified reasons (for example, he led an “immoral” lifestyle, abused alcohol or drugs).

How to split a mortgage

If spouses are divorcing and have a joint mortgage, it can be divided in 3 ways:

1. One spouse buys out the other’s share and continues to pay the loan.
2. The spouse submits an application to the bank to replace the party in the agreement.
3. The apartment is sold, the funds remaining after paying the mortgage are divided between the spouses.

As a rule, the bank is reluctant to replace the debtor in the obligation, since it issued a loan to a solvent citizen, and therefore may doubt the possibility of paying the second spouse (another person), especially if they have any characteristics related to receiving income (for example , is on maternity leave, retired, etc.).

Even if the court indicated in its decision that the mortgage is subject to division, this does not oblige the bank to replace the parties to the agreement.

Mortgage taken out before marriage, during divorce and division of common property

RAZVOdis.RU Divorce Division of property

Division of property is a legally difficult component of divorce. According to statistics, 30% of couples who want a divorce remain together, not wanting to share property.

For those who decide to separate amicably, a mortgage taken out before marriage brings additional problems during a divorce. A mortgage imposes certain obligations and it becomes difficult to divide property in the event of a divorce.

How is an apartment divided during a divorce? There are laws and opportunities to solve the problem peacefully.

Rights of spouses

When getting a divorce, you need to pay attention to the following points:

• Article 34 of the Family Code of the Russian Federation defines property acquired during marriage as common property. In case of divorce, it is divided in half;
• By taking out a mortgage for an apartment, the buyer-borrower becomes the owner of the property.

Who is the owner of the property? The second point explains: the spouse who bought the property is the rightful owner. If the action was committed before marriage, he alone owns the rights. In case of divorce, the second spouse does not have rights to housing: full transfer of ownership, receipt of a share, sale and subsequent division of the proceeds.

The apartment belongs to only one person and remains with the owner after the divorce. If a mortgage was taken out and the amount was not paid when registering the marriage, Article 34 of the RF IC comes into play: the income received by spouses during marriage is common. Even if the wife did housework or looked after the children without paying the mortgage.

The money used to repay the mortgage monthly is joint property.

If the marriage breaks up, both parties can claim them. In the event of a divorce, the owner pays the second spouse a share of the amount made in payments to pay off the mortgage during the existence of the marriage.

It is impossible not to give up the apartment, take it away or not pay the money. If one of the spouses had no income without a good reason and the mortgage was paid off by the working spouse, this must be proven. Judicial practice shows that this is difficult and requires weighty arguments.

If the reason for the lack of income is alcoholism or drug use, there is a chance to win the case. Otherwise, the court will agree with the objective reasons for the lack of earnings.

The law specifies valid reasons and it is difficult to prove the wife’s non-involvement in running the household or raising a child.

Some lawyers argue: there is a chance not to give up the share if you provide the court with receipts that the mortgage was paid by direct deduction from the salary recorded in the organization’s accounting department, without receiving the money in hand, which means there was no actual income and there is nothing to divide. In practice, this option has no legal basis.

Article 34 of the RF IC applies to all types of income considered general. In judicial practice, there were options when the owner of the property wanted to issue a deed of gift to a relative and not pay part of the funds spent on the mortgage in the event of a divorce. A loophole like this is not viable.

To sell/donate property if the mortgage has not been repaid, permission from the bank is required - it is extremely difficult to obtain. It is allowed to sell, but the bank will sell the property on its own.

How to solve the situation?

Dear readers! Our articles talk about typical ways to resolve legal issues, but each case is unique. If you want to find out how to solve your specific problem, please use the online consultant form on the right or call the free hotline:

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A legal and reliable way would be to conclude a marriage contract - drawn up when registering a marriage or immediately before a divorce. The agreement must be drawn up by a specialist, followed by notarization. An oral agreement has no legal force in case of divorce. The legal act on a marriage contract is regulated by Article 92 of the Family Code of the Russian Federation.

Practice shows that drawing up a marriage contract solves most problems related to the division of property.

If the contract states that material assets belong specifically to one of the spouses, then Article 34 of the RF IC is powerless and in the event of a divorce, the property is divided according to the marriage contract. Possible contract clauses:

1. Confirmation that the mortgage was taken out before marriage.
2. Each spouse's share of the loan repayment.
3. Amount of monetary compensation in case of divorce.

The husband takes out a mortgage in whose name the apartment will be registered

Prove that you sold the flag at a higher price to you. It doesn’t matter ANYTHING to whom the car is registered and DO. It’s still good to take out a mortgage for an apartment while married. Debts are common. And so the husband bought it with his own money in cash, and then the wife chopped off half of it for free.

My husband and I took out a mortgage for the apartment. The mortgage and the apartment were issued for 10 years, in my husband’s name. When applying for the loan, the bank did not give me the opportunity to take out a loan and register the apartment in my name. My husband has two adult children from his first.

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What other options are there that can be used?

Dissolution of marital ties is an emotionally complex process; ex-spouses are often unable to make a mutual decision; variations in dispute resolution are as follows:

1. Borrowers stop paying. After a certain period of delay (2-3 months), the bank has the right to forcefully sell the collateral in order to cover losses. A quick sale is carried out at a large discount; it is completely unprofitable for the spouses; they lose property and the money they paid.
2. Through the court, a decision was made on an equal division of responsibilities to repay the loan, but someone does not make the scheduled payments. The result is the same as in the previous paragraph.
3. One of the spouses cedes the house to the other, but demands the return of part of the money paid. To obtain a refund, you have the following options:

• Borrow, sell personal assets, give up your share in something else;
• Apply for a loan: contact the bank with a request to increase the amount of the existing credit line or take out a loan against another collateral.

1. If there are minor children, an unequal division between the couple is possible; part of the property is not necessarily directly proportional to the amount of planned repayments. How an apartment is divided in a mortgage during a divorce if there are children, we will consider below.
2. The civil marriage broke up, and the deal was registered in the name of the husband. Taking into account such introductory information, the ex-husband is the only owner. The wife can only count on some monetary compensation, but significant evidence of the monetary contribution is required: paid receipts, checks.
3. Sometimes it is possible to prove that the second spouse did not contribute to the property, but the process is not easy. Even if all payments were made from the husband’s income, this is equivalent to the family budget. The contribution is considered personal if it is argued that it is a gift/income from the sale of personal assets.

How is mortgaged housing divided if the owner is a husband or wife?

How to divide an apartment with a mortgage during a divorce, algorithm of actions:

• Spouses must act in concert (to minimize losses).
• The initiator applies to the court to divide the assets. The bank is not involved in the meetings because there is no demand to divide the debts (the financial institution retains the right to demand the return of funds from the borrower or guarantor).
• The judge makes a decision on the share distribution; the option of transferring the object into one hand is not excluded.
• Owners apply to the State Registration Authority to obtain a new certificate of ownership.
• Spouses contact the bank with a prepared package of documents: a court opinion, a certificate of ownership, statements from co-borrowers, where they demand to change the terms of the agreement. In this situation, the creditor’s actions are based on the decision of the judicial authorities.

  

This way of resolving the dispute will help save the house if the new requirements of the creditor are unconditionally fulfilled. If the ex-spouses cannot come to a mutual scenario, then the lender accepts a favorable course of events, which can lead to significant losses for the borrowers.

Options for dividing an apartment purchased before marriage

According to Russian law, a pre-marital mortgage in a divorce is divided as follows.

1. The property is recognized as the property of the spouse who took out the loan and housing for himself. The second spouse is reimbursed for the payments he made, either voluntarily or by court decision.
2. The living space is divided into shares in accordance with participation in the payment of the loan debt. After this, the mortgage is reissued to the ex-husband and wife separately.
3. The mortgage loan is paid by the former spouses jointly and after the divorce process.

The bank may require early fulfillment of debt obligations if it considers that the borrower’s income will decrease significantly after the divorce. For example, an ex-husband will give 25% of his salary as child support.

The following situation stands out: the apartment was purchased before marriage in a house under construction, and registration of ownership took place after the registration at the registry office. In this case, the living space is considered already jointly acquired property. Consequently, the property will be divided in half. If the divorce occurred before the house was rented out, then the second spouse can file a claim in court for reimbursement of the money spent on the loan payment.

How is an apartment taken during marriage divided in a mortgage during a divorce?

This is the most common situation in which a husband and wife have equal rights to real estate. At the same time, they also bear joint and several liability for the mortgage taken out. That is, mortgaged real estate, when purchased during marriage, is in any case considered jointly acquired property. Consequently, each spouse has the right to claim half of the property and must assume 50% of the loan obligation.

In practice, managing and dividing housing is far from easy, because it is pledged to the bank. Therefore, all actions with the mortgaged object must be coordinated with the credit institution

Division of a mortgage during a divorce in the absence of a dispute, as well as complicating circumstances (presence of children, only home, etc.) is possible in the following ways:

1. The ownership of an apartment or house is registered in the name of one of the spouses, the loan agreement does not change. And among themselves they sign an agreement on the division of real estate and debt in a 50/50 ratio. Then the ex-husband and wife continue to pay the loan in half. When the loan is paid off, they either sell the property and divide the money or register the right to ½ share for each.
2. One of the former spouses refuses his share. When he has other housing, this option is quite acceptable. He carries out the refusal free of charge or for monetary compensation. The bank re-registers the mortgage and housing completely in the name of the other spouse and removes the co-borrower from the mortgage agreement. However, the credit institution will do this only if the remaining borrower is sufficiently solvent.
3. By agreement of the husband and wife, the entire debt is paid to the bank, that is, the loan is repaid ahead of schedule. Next, the apartment or house is sold, and the funds are divided equally (but possibly in a different order). This division option is optimal when the spouses have money to close the mortgage or the debt balance is small.
4. The apartment or house is sold, and the money from the sale goes to close the debt obligation and the remaining is divided between the spouses. Of course, such an operation is possible only with the approval of the bank. He may not cooperate and oblige the spouses to repay the loan.

A more complex situation arises when there is a dispute when one of the spouses claims a larger share than ½. He can justify this:

• Investing personal funds into a down payment on a mortgage.
• Early payments from the money he had before marriage.
• Contribution of a significant amount by relatives of the spouse and in a number of other cases.

Then the mortgage during divorce is divided as follows:

1. By a settlement agreement or through the court, a higher share of one of the spouses is established and the entire mortgage is re-registered to him, the remaining debt also goes to him. But he pays the second spouse half of the money contributed for the period of cohabitation.
2. With the consent of the bank, the loan is divided into two new loans, each spouse receives their own loan agreement. Real estate also goes to everyone in the amount determined by the court. Not every bank will do this, because its risks increase and if there is a delay, then instead of one loan there will be two.

An apartment purchased during marriage has a mortgage issued to one of the spouses

Even when a gift agreement is drawn up, relatives are exempt from the obligation to pay tax. ✔ Inheritance of an apartment. An apartment received as an inheritance is the personal property of the spouse.

• If at this time the borrower is married, then most likely the court will oblige him to allocate a share in the apartment to his ex-spouse during a divorce.
• If the borrower divorces before receiving the certificate, the court will order compensation to be paid to the ex-spouse, since according to the law, the loan was paid jointly.