Your spouse co-owns land property with another person when you and your spouse decide to build on the same property, for example a house.
However, starting the construction, your spouse – co-owner of the property or you, do not conclude a contract with the third party – the other co-owner of the property, with which the right of construction will be established in your favor.
You and your spouse with collaborative efforts, with your direct or indirect participation, build a house. In this case, will the house be co-owned by you and your spouse, or will it be owned only by your spouse, or will the third party – co-owner of the property – has rights over your house as well?
Due to cases arising in practice in this connection, decided by the courts in a different and contradictory way, the Supreme Court of Cassation (SCC) had to rule on the matter with an interpretative decision.
The permission given by the SCC is as follows: in case of construction, carried out by spouses during their marriage, without an established right of construction, in a land property co-owned between one spouse and a third party, the part of the construction corresponding to the spouse’s co-ownership rights on the land, is acquired under the regime of matrimonial property, if the legal matrimonial regime of property relations is applicable between the spouses.
1 In order to understand the permission given by the Supreme Court, first, we should familiarize ourselves with some basic legal concepts.
1.1 Property regimes applicable between the spouses when concluding a marriage
The regimes that are defined by the Family Code currently in force are three:
- legal matrimonial regime;
- legal regime of division;
- contractual regime.
Spouses, upon entering into marriage, can choose which of the regimes to apply. In the event that the spouses do not explicitly choose one of the three regimes when entering into a marriage, it is considered that the legal matrimonial regime applies to the property relations between them.
What is the application of the legal matrimonial regime?
Real rights (property rights), acquired during the marriage as a result of mutual contribution, shall belong commonly to both spouses, notwithstanding on whose name they have been acquired.
Mutual contribution can be expressed in putting finances, labor, childcare, household work and is assumed until proven otherwise. There are, of course, exceptions to this rule, as some property rights remain personal to each of the spouses in certain cases, but this is not the subject of clarification in this article.
1.2 The “Accretion” rule and the importance of the establishment of a building right
In the ownership act, the rule applies that the owner of the land is the owner of the buildings and plants on it except where something else has been agreed upon (the accretion rule). This rule means that if another person builds something on the property owned by one person, the building, by virtue of the accretion, will become ownership of the owner of the property, and not of the person who built it.
Such development of circumstances can be prevented when a construction right is established by the owner of the property, in favor of the person who wants to build on his property, and then the building will remain the property of the builder and not the property of the owner of the property.
2 Decree № 5 of 1972, item 4, of the Plenum of the Supreme Court
With Decree № 5 of 1972, it is accepted that the building constructed during the marriage on land, individually owned by one spouse, constitutes matrimonial property and belongs mutually to both spouses. This conclusion of the Supreme Court is motivated by the imperative nature of the norm of the art. 13 of the Family Code of 1968, according to which the real and movable property and rights to property acquired by the spouses during the marriage belong mutually to both spouses, regardless of whose name they were acquired.
3 The decision of the Supreme Court from 2022
Art. 13 of the Family Code of 1968 is analogous to Art. 21 of the Family Code of 2009, currently applicable.
The SCC relied precisely on this analogy and adopted the permission of the Plenum of the Supreme Court given in the Decree of 1972, saying that since a building was constructed during the marriage on a land individually owned by one spouse, constitutes matrimonial property, and belongs to both spouses, this would also apply if one spouse co-owns the property with a third party. In such case, what is built in the property is acquired by its owners (the spouse – co-owner and the third party) and that part of it, corresponding to the rights of the co-owner who was married at the time of the construction of the building, is acquired in the regime of matrimonial property, when the matrimonial regime is applicable between the spouses.
In summary: in order to include what was built in a land property jointly owned by one spouse and a third party in the matrimonial property, the following prerequisites must be present:
- The regime of matrimonial property should be applicable between the spouses;
- The spouse, who is not a co-owner of the property, participates directly or indirectly in the construction;
- The built object should be an independent object of the property right.
Also, if there is no established right of construction in favor of the spouse who is a co-owner of the property, this leads to the application of the principle of accretion in relation to the third party co-owner of the landed property and this third party will acquire an ideal part of the constructed building.
On the other hand, the spouse who is the co-owner of the property, in that capacity, will acquire an ideal part of the constructed building within his rights on the land, which will be included in the matrimonial property if the construction is carried out with the participation of the other spouse. In the relations between the co-owners of the land property, the “accretion” rule is applicable, but in the relations between the spouses, the norms of the Family Code apply. As a result, the co-ownership that will arise over the constructed building will not exclude the right of ownership of the third party on a corresponding part of the constructed object. The co-ownership of the constructed building will be between the two spouses (by virtue of the matrimonial property as a special mutual ownership) and the third person.
4 In which cases the building may not become part of the matrimonial property
In relation to the above, when the property relations between the spouses are not matrimonial, but divided, then the building, if it is constructed by one spouse who is a co-owner of the property, then what was built will remain for them. If there is a settlement of property relations according to the contractual regime, the assessment of whose property the building will be shall be made according to the agreements between the parties objectified in the contract.
Even if in the relationship between the spouses applies the relationship of matrimonial property, what is built may also not become part of the matrimonial property if the spouse who does not own the land property does not participate directly or indirectly in the construction.
If the constructed building is an object with a service purpose, which does not have the quality of an independent object, such an object will become co-owned by the spouse, who owns ideal parts of the landed property, and by the third party – co-owner of the property by virtue of the accretion rule.
The article above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.