4 October 2021
Most marriages and registered partnerships do involve joint property.
For example, partners often buy a house together. When the marriage or partnership ends, this common property must be divided. If one partner has invested more than the other, this can lead to the granting of ‘reimbursement rights’.
If party A invests in the capital of party B with its own resources, or has invested a larger part in the joint capital than party B, this leads to a skewed (economic) ownership relationship. For example, the parties jointly buy a house worth € 400,000, whereby Party A pays € 100,000 from its own resources, and € 300,000 is financed by a joint mortgage loan. If the parties split up, party A will in many cases want to get back its (higher) investment. This creates a ‘reimbursement right’.
‘Own resources’ are resources that belong exclusively to one party. For spouses and registered partners, this may be laid down in prenuptial agreements, for example. It is also possible that one of the parties has received a gift or inheritance under the exclusion clause (that is a condition set by the donor or testator, which means that the gift or inheritance does not fall within the community of property).
The ‘nominality theory’ applies to investments made before 1 January 2012. This means that the ‘recoverable’ right to compensation is then same as the amount invested from own resources. The ‘investment doctrine’ applies to investments made on or after 1 January 2012; the value of the right to compensation is determined in proportion to the division ratio between the deposit and the total value at the time of deposit. In our example, that division ratio is (100,000/400,000=) 25%. If the house is sold for € 500,000 at the end of the marriage, the right to compensation is therefore € 125,000.
The regulation on reimbursement rights has been explicitly included in the law for spouses and registered partners. Not for cohabitants. General property law applies to them. The existence of a comparable right to reimburse is assumed for cohabitants, but in principle the theory of nominality also applies to investments after 1 January 2012.
The right to reimburse already arises at the time of investment and is in principle immediately due and payable.
Do not wait too long; for married persons and registered partners, the claim may become statute-barred 6 months after the dissolution of the marriage or partnership. In principle, for cohabitants, the claim lapses after five years after making the investment. It can be extended for five years only in exceptional cases. Further agreements about what is claimable can be made in the prenuptial agreement, partner conditions or the cohabitation contract. It will usually be established that the right to reimburse is due at the end of the relationship or, for example, the sale of the property.
If you think you are entitled to a reimbursement right or if you have any questions about the determination, calculation or whether you can claim a reimbursement right, you can of course contact me.
