Dissolution of the joint ownership of the spouses during marriage

The joint ownership of the spouses is regulated in the Civil Code in Article 143, according to which everything acquired by either spouse during the marriage is jointly owned. This includes both assets and liabilities of the spouses. If the spouses have assets in the joint property regime, these assets may be used to satisfy debts caused by one spouse only.

As one of the institutes for the protection of the assets of one of the spouses in the joint ownership of the spouses is the dissolution of in the joint ownership. It should be noted, however, that the effects of the dissolution of the joint ownership of the spouses only take effect from the date of the court’s final decision on the dissolution for the future.

Spouses cannot agree to dissolve and settle the joint ownership of the spouses themselves during the marriage, but the court must do so on the application of one of them: “The joint owners cannot agree on the dissolution and settlement of the joint ownership of the matrimonial property. During the marriage, only the court may dissolve the joint ownership.” (Judgment of the Supreme Court of the Slovak Republic, Case No. 5Cz 51/73)

In order to dissolve the the joint ownership of the spouses during the marriage, at least one of the statutory reasons must be met:

You can read more about the grounds for dissolving the joint ownership of the spouses during marriage in our post here: Reasons for dissolving the joint ownership of the spouses during marriage

The joint ownership of the spouses is usually dissolved together with the dissolution of the marriage, but in statutory cases it can be dissolved during the marriage. One of the spouses may apply to the court, on application, for the dissolution of the the joint ownership of the spouses for serious reasons, in particular if the continuation of the the joint ownership of the spouses would be contrary to good morals. If the court grants such an application, the the joint ownership of the spouses is dissolved. It is up to the court to define what good morals are and when there is a conflict of morals, which may rely on existing case law or legal doctrine. In the context of the dissolution of the the joint ownership of the spouses, good morals may be violated, for example, when one spouse endangers another’s property, or when the spouse’s serious behaviour manifests itself in wasteful use of the common property to the detriment of the family – i.e. concealment of high debts, etc. For the court to annul the the joint ownership of the spouses on application, it is not enough for the spouses to argue identically, it is necessary to prove the existence of compelling reasons. The dissolution of the the joint ownership of the spouses takes place on the date of the final dissolution decision.

According to legal literature, serioous reasons include, for example, “‘Serious reasons’, which are a condition for granting a petition for the dissolution of the joint ownership of the spouses, cannot be precisely determined in advance. It will be a matter for the court’s specific findings as to the parties’ marital circumstances, their relationship with each other and the conduct of the defendant spouse who is bringing the application as to whether the conditions for a favourable decision are met. Serious grounds for the dissolution of the joint ownership of the spouses may be considered to be the wasteful behaviour of one of the spouses, damage to the economic interests of the family, the prolonged breakdown of the joint household, etc. As a rule, the dissolution of the joint ownership of the spouses is based on serious conduct on the part of the spouse which manifests itself in the wasteful use of the common property to the detriment of the family, in particular the minor children, or in the fact that the spouse does not participate at all in the creation of the common property, avoids work, does not live permanently with the family and does not provide for the family’s needs. In such a case, the court will normally find that the institution of joint ownership of the spouses does not fulfil its purpose in the particular case, that its continuation would be contrary to good morals and that one of the spouses would be substantially harmed by it.” (Fekete, I.: Civil Code. Commentary)

The Trnava Regional Court also commented on the reason that the spouses do not live together in the same household in its decision, Case No. 11CoP/220/2017:

If one or both spouses obtain a permit to do business, the court will dissolve the joint ownership of the spouses on the petition of the spouse who is not doing business (if both are doing business, on the petition of one of them). A business is a continuous activity carried out by an entrepreneur on his/her own account and on his/her own responsibility for the purpose of making a profit. An entrepreneur is a person as defined in Section 2 of the Commercial Code:

In the proceedings, the court determines only two things: 1) whether the petition was filed by the person entitled (the other spouse) and 2) whether one of the spouses is carrying on a business. If this is the case, the joint ownership of the of the spouses must be dissolved.

The court fee for an action under the Court Fees Act is EUR 165.50.

According to Section 147 of the Civil Code, if the following conditions are met, the spouse must agree to satisfy the claims of the other spouse’s creditor:

Donation to a close person. Under the Civil Code, the conclusion of a gift agreement would be a repudiatory act under Article 42 of the Civil Code, whereby acts done by the debtor in the last 3 years in favour of a person close to him constitute repudiatory acts against which a creditor may bring an action for repudiation in court and the act becomes ineffective.

A close person can be defined as:

Similarly, this case could also involve the criminal offence of creditor detriment under section 239 of the Criminal Code, where “whoever, even partially, frustrates the satisfaction of his creditor by …. selling, exchanging or otherwise removing even a part of his property … shall be punished by imprisonment for up to two years.”

An opposed act is also an act which the debtor has done without adequate consideration (adequate being determined at least by the amount expressed in an expert opinion or professional estimate) and which has been done with the intention of unreasonably delaying or preventing payment to the creditor. The condition on which a creditor may claim that a transaction fulfilling the abovementioned characteristics is void is that the transaction has been carried out within the last three years. An exception to the rule in the case of a voidable instrument is the ignorance of the person for whose benefit the debtor has performed the voidable instrument. Thus, where a debtor sells real estate to a third party who subsequently sells that real estate to the debtor’s husband, that person cannot be presumed to have been unaware of the causes and consequences of the debtor’s conduct, who, by that conduct, was attempting to act in a manner which would ultimately result in the creditor being defrauded. Therefore, such conduct may constitute an irreconcilable act.

According to case law, it is not enough to dissolve the joint ownership of the spouses, it must also be settled: “to enforce an obligation incurred during the marriage only one of the spouses may be ordered to enforce a judgment also on property belonging to the joint ownership of the spouses which was not settled at the time the enforcement proceedings were initiated. That conclusion undoubtedly also applies to the joint ownership of the spouses.’

After the dissolution of the joint ownership of the spouses, it is is settled in accordance with § 149 and § 150 by agreement between the spouses or by the court at the request of one of the spouses. The agreement on the settlement of the joint ownership of the spouses may be concluded after the court’s judgment on the dissolution of the joint ownership of the spouses has become final. If there is real property in the property regime, the agreement on the division of the property regime must be in writing and shall take effect upon entry in the Land Register.

The possibility of concluding an agreement reflects the contractual freedom of the parties and therefore the parties may also agree on terms of settlement different from the division of the property in the joint ownership of the spouses equally between the spouses. According to the decision 4 Cdo 147/2011 of the Supreme Court of the Slovak Republic, an agreement on the settlement of the joint ownership of the spouses by which one of the parties acquires a substantially smaller share or acquires nothing, as well as an agreement which does not concern the entire property (partial settlement of the joint ownership of the spouses agreement) is valid.

The agreement on the reduction of the joint ownership of the spouses within the meaning of Section 143a of the Civil Code applies only to assets acquired after the conclusion of the agreement on the reduction. The reduction of the joint ownership of the spouses may be effected in the form of a notarial deed. By means of the narrowing, the spouses determine the items they wish to exclude from the joint ownership of the spouses. The specific feature is that this agreement only applies to items that the spouse will acquire in the future, i.e. items that are not yet part of the joint ownership of the spouses.