Acquisition of real estate by one of the spouses

The mandatory requirements for a real estate purchase agreement are established by Act No. 162/1995 Coll. on the Real Estate Cadastre and on the Entry of Ownership and Other Rights to Real Estate (the Cadastral Act), and in the case of an apartment/non-residential space, also by Act No. 182/1993 Coll. on the Ownership of Apartments and Non-Residential Spaces.

According to Section 42, Para. 2, Letter a) of the Cadastral Act, a participant in a legal relationship – a natural person – must be identified by name, surname, maiden name, date of birth, personal identification number, and permanent residence.

According to Section 24, Para. 1, Letter a), Point 1 of the Cadastral Act, the proposal to initiate cadastral proceedings must contain the identification data of the applicant – a natural person – including name, surname, maiden name, date of birth, personal identification number (or another identifier for a foreigner), permanent residence, a domestic delivery address if different from the permanent residence, and citizenship data. It follows from the above that providing information on marital status is not mandatory. Therefore, the cadastre does not examine whether the buyer is married or not.

In the event that spouses purchase real estate for their BSM, both can, of course, appear as buyers in the purchase agreement and as applicants in the proposal for entry. In such a case, the title deed will state that both spouses are owners in the ratio of 1/1.

It is not excluded for only one of the spouses to appear in the purchase agreement, the proposal, and subsequently on the title deed, even if the property belongs to the BSM. The fact of whether only one or both spouses are listed on the title deed has no bearing on whether the property belongs to the BSM. However, if one spouse were to challenge, for example, the transfer of such real estate, they could be successful if it were proven that the real estate (despite only one spouse being listed on the LV) was part of the BSM.

This is related to the fact that while ordinary matters regarding common items can be handled by either spouse, in other matters (which will almost always include the disposal of real estate), the consent of both spouses is required; otherwise, the legal act is invalid. When acquiring real estate, we therefore recommend verifying whether the consent of the spouse who is not a party to the contract was also given.

What does it mean if only one spouse is listed on the title deed?

Given the general nature of the question, several possibilities come into play:

• If it is a property that would normally be subject to BSM because it was acquired during the marriage, but only one spouse appears on the title deed, it is possible that only one spouse, not both, was a party to the contract on which the acquisition was based. In such a case, the cadastre would register as owner the spouse who was the contracting party. However, if the property was acquired at least in part using funds belonging to the BSM, it may be subject to BSM even if the title deed makes it appear to be in exclusive ownership.

• If, however, a spouse purchased real estate using funds that are in their personal ownership (e.g., savings from before the marriage, financial yields from property of which they are the exclusive owner), the real estate would belong exclusively to them, even if acquired during the marriage.

• Spouses may also enter into a so-called agreement to restrict the scope of BSM (Section 143a of the Civil Code), in which they undertake that certain things, which would otherwise be subject to BSM, will be acquired in the future by each separately into their exclusive ownership. This agreement, however, cannot apply to things that already form part of the BSM property. The agreement must be made in the form of a notarial protocol.

Finally, a spouse will be registered on the title deed as the sole owner if they acquired (purchased, received as a gift) the property before entering into the marriage.

What does BSM mean on a title deed? BSM stands for bezpodielové spoluvlastníctvo manželov (community property of spouses). It is a legal regime for the acquisition of property into joint ownership that exists only between spouses. Under this regime, every item acquired by the spouses during the marriage belongs to their joint ownership (exceptions are primarily established by Section 143 of the Civil Code).

Hello, The ruling of the City Court in Prague dated March 21, 1977, Case No. 11 Co 89/1977 (R 45/1979), is decisive in this regard: “If, during the settlement of their community property, immovable or movable items fall into the individual personal ownership of one of the former spouses, even at a time when they have already entered into a subsequent marriage, the acquisition of these items does not fall into the BSM of the current marriage (within the meaning of Section 142 of the Civil Code). This holds true even if the compensation provided to the other co-owner to settle mutual claims from the previous community property was paid in full or in part from common funds in the newly formed community property. However, there is an obligation to reimburse what was expended from the common property of the spouses toward the property in the exclusive ownership of one spouse (Section 150 of the Civil Code).”

We select the following passage from the reasoning of the cited decision: If BSM is terminated and, during its settlement, a certain item falls to only one of the joint owners, then that person does not acquire the item, or a part or share of it, because they were already the owner of the entire item beforehand; the only change that occurs is that their ownership right is no longer limited by the rights and obligations of another co-owner. Therefore, this is not an acquisition of new property rights, but merely a change in the exercise of rights and obligations arising from ownership of the same item as a whole.

However, regarding your formulated question, we must point out that from a legal theory perspective, money obtained through a sale is not considered “yields” (proceeds/income). According to established judicial practice, yields do belong to the BSM.

For example, according to the decision of the Supreme Court of the CSSR dated February 3, 1972, Case No. Cpj 86/1971 (R 42/1972): “Yields, benefits, and increments of a thing belong to the BSM, whether the thing itself is in the community property of the spouses or in the ownership of only one spouse. (…)”

However, the cited decision further states that “Items acquired in exchange for an item, or from the proceeds of an item that was in the personal ownership of one of the spouses, remain in the personal ownership of that spouse. In such a case, it is not an acquisition of new property or an increase in existing property during the marriage, but a change that does not affect the nature of these items as subjects of personal ownership.”

Based on the above, it can be concluded that while yields from an item belonging to BSM clearly fall under the BSM regime, money obtained from the sale of an item cannot be considered “yields,” as it is de facto the equivalent of the given item at the same value. This is a so-called transformation of property, because the item itself changes, but its value remains approximately the same, and for that reason, the original ownership regime is preserved: “Literature and judicial practice support the so-called subrogation theory, according to which items take the place of money obtained for other items through sale. (…) This is a so-called transformation of an item. Therefore, an item acquired (by purchase or exchange) using funds belonging to the separate property of one of the spouses will not belong to the BSM (Source: Števček et al.: Civil Code: Commentary, 2nd edition C. H. Beck, 2019, pp. 1103–1138).”

Hello, According to Section 143 of Act No. 40/1964 Coll., the Civil Code (hereinafter referred to as “CC”): “In the community property of spouses is everything that can be a subject of ownership and which was acquired by either spouse during the marriage (…).”

It follows from the cited provision that if the apartment was purchased before entering into the marriage, it will belong to the exclusive ownership of the person who purchased it (or into joint tenancy if there were multiple buyers).

Conversely, funds obtained from a mortgage taken out by the spouses during the marriage will be an eligible subject of BSM.

Even if funds belonging to the BSM were used for a thing that is in the exclusive ownership of only one of the spouses (e.g., in the form of investments), this fact in itself does not cause a change in the ownership regime of the item being thus appreciated. In your case, this means that the apartment will continue to be in your husband’s exclusive ownership, despite the fact that the loan money belongs to both spouses jointly.

In professional literature, we also encounter the opinion that: “If a building under construction is in the exclusive ownership of only one of the spouses at the time of its origin, the building will not belong to the community property of spouses, even if common funds of both spouses were used for further finishing work. Possible investments into the separate property of one of the spouses could only be taken into account within the proceedings for the settlement of the community property of spouses (Števček et al.: Civil Code – Commentary, 2nd edition, C. H. Beck, 2019).”

As hinted in the previous text, the amount belonging to the BSM by which the property belonging to only one spouse was appreciated can be reimbursed within the BSM settlement that follows its termination. According to Section 150 of the CC, during the BSM settlement, each spouse is “obliged to compensate (the other spouse) for what was expended from the common property on their other property.”