What to look out for when selling a property during the marriage?

Author of the article: Mgr. Mgr. Alice Dajčarová, LL.M., MSc., ARROWS (office@arws.cz, +420 245 007 740)

Marriage and the possible existence of community property (SJM) affects, among other things, the processes and procedures in the eventual sale of real estate. What to watch out for if you want to sell a property and you are in a marriage where you and your spouse have community property? Below is a brief description of at least the most basic steps you should take before proceeding with the sale.

What is the registration in the Land Registry?

In the first place, it is always advisable to check the status of the land registry. If the Land Registry directly records that the property belongs to the matrimonial property in relation to the ownership right, then the situation is clear and you should proceed accordingly (more on this below).

But beware! If you or only your spouse is listed as the owner in the Land Registry, it cannot be automatically concluded that the property does not belong to the community property as a result of such registration. In such a case, it must be further examined whether, despite such a registration in the Land Registry, the property does in fact belong to the community property.

Is the property effectively part of the community of property?

In order to assess whether the real estate is the sole property of one of the spouses or whether it is part of the matrimonial property, the first thing to be considered is on the basis of which legal fact and at what time the spouse acquired the real estate.

If the spouse acquired the real estate before the marriage and during the marriage the SJM was not extended to include the real estate, then it is the sole property of the spouse. The same will be the case if the spouse acquired the immovable property by inheritance or by a deed of gift, irrespective of whether he or she was already married or whether this occurred before the marriage.

If the spouse acquired the real estate under a contract of sale after the marriage, then, in the absence of statutory exceptions, such real estate will be included in the community property even if the contract of sale was concluded and signed by only one of the spouses.

Procedure for the sale

1. The property is not in the community property

If the property you want to sell is not in the community property, this does not mean that there is nothing further to be done and that the property can be sold without any involvement of the spouse. First of all, it is still necessary to take into account whether there is a family household in the non-SJM property (see separate article on this topic, available here).

At this point we can briefly state that if there is no family household in the property being sold, you can conclude the purchase contract and sell the property without the consent and involvement of the husband. In the event that there is a family household, it would be imperative that your husband consents to the sale of the property or, ideally, signs the contract of sale with you as an intervener.

2. The property is in the community property

If the property is part of the SJM, then the husband's involvement is of course absolutely necessary. In this case, it will be a so-called non-cash matter (see separate article on this topic, available here), for which you need the husband's consent.

Ideally, both you and your husband will sign the purchase contract on the seller's side. If, for example, the purchase contract has already been signed and your husband has been left out of the process, then you will need to obtain your husband's written consent to the sale of the property or to the conclusion of this particular purchase contract.

Otherwise, the husband could contest the validity of the contract of sale in the future, which could cause significant problems for both you and the person who bought the property from you (especially if the buyer financed the purchase with a mortgage loan). In such a case, you could also run a high risk of the buyer claiming damages against you as a result of your wrongful conduct.

Conclusion

As is clear from the above, even the sale of a property is not as clear and straightforward a matter as it might at first appear. It is therefore always advisable to consult a professional so that a wrongly chosen procedure does not lead to situations that could cause significant problems for both you and the buyer in the future. As a rule, the cost of having a professional assess the matter and prepare the contract documentation is only a fraction of the potential costs that may arise if a problem arises.

By setting up the correct procedure and having the contract documentation prepared by a professional, you can avoid any future worries and costs, both financial and time.

On the buyer's side, it is also always advisable to check, within the limits of his/her possibilities, whether the property he/she intends to buy does not belong to the SJM of the seller, at least by checking the title of acquisition, which can be obtained from the relevant land registry.