Compensation for investment into joint property

A similar situation has already been addressed by the Supreme Court of the Slovak Republic:

“During the marriage, it is common for property to be transferred from the separate (exclusive) property of the spouses to their joint property and vice versa. The legal framework does not exclude transfers within the separate (exclusive) property of the spouses either. The refund claim of one spouse arises at the moment when such separate (exclusive) property was used for joint property, although this claim can only be exercised after the termination of joint property settlement (BSM). When assessing the question of refund (monetary or in-kind expenses), it must be taken into account that it has to be the spouse’s own funds spent on the joint property which is subject to division (i.e., it is counted as part of the division – allocation). The subject of the division, which consists in determining and dividing the joint property, can only be that property which exists on the day of termination of the spouses’ joint ownership as joint property (see R 104/67).

Thus, it concerns such investments that manifest in the joint property.

In the case at hand, the unfinished family house, into which the appellant was supposed to invest gifted monetary funds, was sold during the marriage; the funds from its sale were subsequently spent (partly to settle obligations and partly to purchase an apartment), which was not disputed between the parties, and the appellant himself uses this fact argumentatively. The appellant demands consideration of his own monetary investments made into joint property which did not exist on the day of termination of the joint ownership of spouses (did not constitute BSM property).

Such a refund claim of the appellant cannot be granted under § 150 of the Civil Code, even though there is no doubt that the appellant invested his own funds into the construction of the family house. This is prevented by the fact that this investment is not reflected in the property being settled, the unfinished family house is not part of the division of joint property (it does not form part of the BSM estate, and no allocation to either spouse occurs). The funds obtained from its sale were spent and cannot be considered as separate (exclusive) property of either spouse. Refund compensation, as claimed by the appellant, cannot be accepted under § 150 second sentence of the Civil Code. This is because the basic legal prerequisites for the implementation of refund compensation are missing here: the investment of own property, the existence of the thing belonging to the BSM, into which the investment was made, and which is subject to division (allocation) of the BSM. Such a thing must exist at the time of termination of BSM and be subject to the division of BSM. If this is no longer the case, it is not possible during the settlement to take into account what one spouse invested as an acquisition. The court can only settle those values and investments that formed part of the BSM at the time of its termination.

Beyond the above, the appellate court generally adds that the circumstances of the acquisition of joint property by the spouses may be reflected in considerations of exceptions justifying the breach of the principle of equality (parity) in the settlement of property in the BSM, which assumes that the shares of both spouses are equal (compare e.g. I. ÚS 537/2012, point II. of the reasoning). Such an exception may include how each spouse contributed to the acquisition of joint property, but even taking such an exception into account excludes that the other spouse be obligated to financial compensation (see e.g. R 42/1972, p. 139, Z IV s. 499 et seq.).” Source: Supreme Court of the Slovak Republic, Case No. 7 Cdo 288/2013