Resolving property disputes of spouses

Resolving property disputes of spouses

by George Coucounis

“The contribution in the acquisition of an immovable property is adjusted to its value at the time of the separation”

THE property relations between spouses vary from case to case because of the different kinds of assets, the time and manner of their acquisition, the contribution of each spouse and on whose name they are registered. In practice, these issues are proved to be serious and difficult to resolve. The term “property relations” between spouses who are separated means their relations involving movable and immovable property acquired with the prospect of marriage, before or at any time during the marriage by any of the spouses. “Contribution” means any kind of contribution by the spouses or the creation of property and includes taking care of the family members and home.

The issue of resolving property disputes between spouses is within the jurisdiction of the Family Court and is regulated by article 14 of the law (L.232/1991) stating the following: “14 (1) If the marriage has been dissolved or annulled or if the spouses are separated and the property of the one spouse has been increased after the marriage, the other spouse, having contributed in any way to the said increase, is entitled to file an action before the Court and claim such part of the increase resulting from his/her contribution. (2) The contribution of a spouse in the increase of the other spouse’s property is considered to be 1/3 of the increase, unless such contribution is proven to be higher or lower. (3) Whatever the spouses acquired (a) as a donation, inheritance, bequest or other gift, (b) through the disposal of property acquired as described in paragraph (a), is not included in the increase of their property”.

An issue arises in relation to the property of a spouse, the value of which increases over time, whether the contribution to the acquisition of the property will be deducted without adjustment or will be adjusted according to its value at the time of separation. The issue of added value due to the increase in property prices was raised in the context of the unanimous decision of the Supreme Court dated 15.12.2021. In particular, the wife suggested that the difference between the purchase price of the house and its value at the time of the separation constituted its natural added value due to the increase in the property prices and the husband could not have any contribution to it.

The Court agreed with the wife that there was added value, which could only be attributed to the increase in the property prices. The house was purchased in 1999 for €119.602 and in 2011 was worth €329.000. The Court stressed however that the person who has contributed to its acquisition is also entitled to this added value, strictly speaking depending on when his contribution was made. In the simplest example, the contributor to a percentage of the cost for the purchase of the house is entitled to the same percentage of the value of the house at the time of the separation; not only to the amount he paid for the purchase. Otherwise, as the Court states, it would not be a question of attributing part of the increase, but of returning the amount of the contribution, as if it were an interest-free loan to the other spouse. As with the registered owner, the rest of the value is returned and not only the value equal to the amount he had paid then.

The Court concluded that the issue of added value due to the increase in property prices leads to the issue raised by the wife, since she and her father paid amounts corresponding to 76% of the price of the house or in proportion 53/70 of its purchase cost. This contribution adjusted to the proportion of 53/70 of the value of the house at the time of the separation, was equal to €249.100. Therefore, as the wife suggested, the husband’s contribution in relation to the house should be sought in the remaining value, from which the existing debt of the house should be deducted. The Court agreed and assessed the amount of the husband’s contribution to 1/3 of the remaining amount after deducting the existing loan, which was undertaken by the wife.