Real estate and marriage: Never two without a roof

Getting married is not only the occasion to have a nice party with family and friends. Beyond the feelings, there are also "material" consequences that we don't always think about or that we put off until later. Marriage is also the union of two assets to become one. A patrimony that will have to be managed, made to grow and shared when the marriage ends. The house is a key part of this patrimony. With all that it entails: choice of matrimonial regime, financing, protection of your other half... So before saying "I do" in front of the Mayor, think about meeting your notary.

Buying before getting married

Let's take the case of Melanie and Nicolas. This young couple in their thirties has been renting for 3 years. They have decided to become owners. The marriage is planned but afterwards... A priori, buying for two without being married is not a problem as long as you take a few precautions and ask yourself the right questions. First of all, they should know how to acquire the property. The notary will advise them to buy in joint ownership. It allows two people to buy a property by integrating the financial contributions of each of the buyers. Melanie and Nicolas will be owners, each to the extent of their contribution and their share of the repayment of the joint loan (60-40, 70-30...). Of course, this distribution must be written in black and white in the deed of purchase. If there is no mention of it, Melanie and Nicolas will be considered as owners for 50% each. It is important that the division mentioned reflects the real contributions of each of them to avoid any dispute in case of separation. To repay the loan, the banks recommend opening a joint account that will be used only for this purpose. In case of separation, it will be easier to trace the history of the transfers of each one. And if by misfortune a death occurs, it is necessary to know that contrary to a married couple, the pacsés or cohabitants do not inherit automatically one from the other. Only a will protects one half and avoids that the house acquired in common becomes an issue with the other heirs. However, one should not assume the worst and in the end, Melanie and Nicolas got married and had a nice apartment.

Living with a spouse who owns

Living with your spouse who already owns the property seems simple. All you have to do is to move in with him (or her). But in reality, it can quickly become more complex. Because if you think about it, you are not really at home. You feel "obliged" to get involved financially. In addition to a participation in the current expenses, some will go as far as opting for the status of co-owner by buying back 50% of the property.
Let's talk about Monique who owns a piece of land given by her parents several years ago. Married to Pascal, they are thinking of building on it. What luck! Yes and no. Because it could complicate things, especially if there is no marriage contract. Indeed, the owner of the house is not the one you think. According to a great principle of law, "ownership of the ground entails ownership of the top and bottom". If we follow this reasoning, it means that Monique will be the sole owner of the house. Pascal, who did not participate in the purchase of the land but co-financed the construction of the house, has no right to it. It is legitimate that he considers himself wronged, because he participated in the enrichment of his wife's patrimony. As long as everything is going well within the couple, this should not be a problem. However, when one of the spouses dies or following a divorce, the spouses' own property and their joint property are separated and divided. It is at this point that the financial participation of the spouse who does not own the land will be discussed. Pascal will be entitled to what is called a "reward" to restore the balance of the situation. Let's imagine that Monique and Pascal have borrowed 120 000 € for the construction. The current value of the property (land + house) is 260 000 €. The land is estimated at 90 000 €. The value of the land is deducted from the total, i.e. 260 000 - 90 000 = 150 000 €. Monique must pay Pascal 150 000 / 2, i.e. 75 000 € as a "reward" in case of divorce or death.
To avoid this situation and to be sure that the house belongs to both spouses, the best solution is to review the matrimonial regime and to foresee a "clause d'ameublissement". The house will fall into the community. In the event of death, at the time of dissolution of the matrimonial regime and partition, the surviving spouse can request the allocation of this property that has become common.

Good to know

Using the couple's money to renovate a property that belongs to only one of the spouses will result in the payment of a reward to the other spouse in the event of divorce and sale of the property.

Building your real estate assets together

The notaries will tell you! To avoid complications, the easiest way is to buy while married. And this is where the choice of matrimonial property regime will play its role. If, like nearly 80% of married couples, you have not made any plans, you will be subject by default to the regime of community of acquests. The spouses who buy a house together are both owners and have the same rights on the property. In the event of the death of one of the spouses, the other spouse gets half of the joint property without paying any taxes. In the event of divorce, all property purchased during the marriage belongs equally to both spouses. Designed for general cases, the legal regime of community of property reduced to acquests finds its limits when a particular family or patrimonial situation arises. This is the case when one of the spouses has a self-employed profession that entails financial risks (liberal profession, company manager, craftsman, merchant). In this case, it is necessary to turn to another status that is better adapted. Let's take the example of Marc, a company director, and Sophie, who works in a daycare center. The notary will advise them to opt for the separation of property regime. With this system, there are no common assets. Each of them remains the owner of the property they had before the marriage and of the property they receive by donation or inheritance during the marriage. Property acquired after the marriage also remains the property of the person who bought it. But under these conditions, how will Marc and Sophie be able to buy the house of their dreams? And who will own it? Don't worry, the separation of property is not an obstacle to buying together, but care must be taken to indicate in the deed of purchase the conditions under which the property is purchased (more precisely, the contributions made by each of them and their respective contributions to the repayment of the monthly loan payments). Depending on the personal situation of the couple, it may also be interesting to consider the regime of universal community. All assets, present and future, owned by the spouses are shared, regardless of the date of acquisition (before or after the marriage), their origin (purchase, donation...) and their method of financing. Both spouses are equal owners of the property, even if it was acquired by only one of them. If it is completed by a clause of integral attribution, the surviving spouse can collect the totality of the couple's goods without transfer duties. This ensures maximum protection.

Financing your project together

Even if the decrease in real estate credit rates is favorable to all those who wish to buy a house, it is always easier to borrow as a couple than alone. Being in couple is an undeniable asset with the banks. The reason is simple. The lending institution will pool the couple's resources. This "mutualization" of funds is interesting for everyone. The borrowers multiply by two their capacity of loan, their rate of indebtedness and the amount of their remainder to live (i.e. the share of the incomes which it remains to the household to finance the current expenditure once the expenses of loans paid). For the bank, borrowing with two people reduces repayment problems. When there are two borrowers, the risk of job loss and therefore of non-repayment of the loan does not rest on one person alone, which makes the project more secure in the eyes of the banks.
Afterwards, it doesn't matter if your income and contributions are equal or not. It is frequent that the distribution of the shares of each one in the financing of the good is not identical. The most important thing is that it appears somewhere. If part of the financing comes from a gift or an inheritance received by one of the spouses, it is essential to mention it in the deed of purchase. In legal terms, this is a "declaration of the origin of the money". In case of separation, the spouse who financed the purchase by this way will obtain an equivalent "compensation" (legally called "a reward").
Couples are prime customers for a bank. Young married people often have many projects, which can lead them in the long term to subscribe alife insurance, a PEL... within the same establishment.

The solidarity clause

Whether you are married, civil union or cohabiting at the time of the real estate loan, the lending institution will make you sign a solidarity clause. It binds you to your spouse and obliges you to repay the entire loan, regardless of the events that occur during the term of the loan. The loss of employment or death of one of the two borrowers can be covered by loan insurance.

Planning for the future

Being married is also about planning for the future. The home that serves as the main residence of a married couple benefits from specific protection. During all the stages of the couple's life, it will benefit from a special status, a sort of immunity, which will preserve it from the vicissitudes that may arise in the event of divorce or death of one of the spouses.
Throughout the marriage, the dwelling is protected by the rule of co-management which prohibits a spouse from performing acts alone that would deprive the family of the enjoyment of the dwelling.This prohibition applies to sales, gifts, rentals, contributions to companies, etc. For these acts, the consent of both spouses is required, regardless of their matrimonial regime. And even if one of them is the only owner. The one who did not give his consent can ask for the cancellation of the act before the family affairs judge.
Following the death of one of the spouses, the survivor has two rights intended to ensure his or her enjoyment of the home. First, the temporary right to the dwelling allows him/her to occupy the dwelling and to use all of the property in it, free of charge, for one year. It does not matter who owns the property (the couple or one of the spouses). This temporary right is of public order. It is impossible to remove it by will! It is automatically executed without any particular formality.
After the one-year period, the life estate right takes over. This is a real right of use and habitation that the spouse can enjoy until the end of his or her life. On the condition that he/she makes the request and informs the heirs of his/her wish. It is possible to do so simply, in their presence, during an appointment with the notary in charge of settling the estate. However, it should be noted that the deceased may have prevented his or her spouse from benefiting from this right by will.

Important

Whether the family home belongs to one spouse or to the other, all dispositions (donation, sale or mortgage) must be agreed upon by both spouses.

Marie-Christine Mémoire