Regime of general community of property 3
Regime of general community of property 3

Regime of general community of property Part 3: Compensation rights

As per 1 January 2012, a legislative proposal on general community of goods and property takes effect, as announced in my previous weblogs (Part 1 and Part 2). What does this mean for divorcing couples? In order to shed some light on the practicalities, I am listing some of the changes that will affect couples filing for divorce under the new provisions.

Compensation rights

Claims for compensation may be made, whenever spouses invest their “own “money in a jointly owned asset. Couples married under the matrimonial regime of community of goods and property may still have access to own funds, such as inheritances or gifts, if these are covered by an exemption clause.

Let us take, for example, a couple that is married under the regime of community of property. The husband inherited € 50,000 under an exemption clause (see article: Divorce and exclusion clauses under dutch law  inheritances) and, invests it in the improvement of the matrimonial home. This home, however, is covered by the community of property and goods. Should the couple decide to file for divorce, the husband will have a claim for compensation, since he has invested his ’own’ money, to raise the value of the matrimonial home. Therefore, he is entitled to his € 50.000, before the house, including the increased value, gets equally divided.

The situation, at present

At present, the husband has a “nominal ’right to claim the € 50,000 invested in the matrimonial home. Increased or decreased value of the house is not taken into account.

The future situation

After 1 January 2012, things will change insofar, as the husband will then be able to claim the invested sum plus the increased value or minus the decreased value, that occurred due to his investment.  The moment in time, when the money was invested, is irrelevant. However, future jurisprudence may alter the situation, as disputes are to be expected.

When does the new situation take effect?

The new legislative proposal takes immediate effect on 1 January 2012, leaving all claims for compensation previous to this date unaltered. Couples filing for divorce after 1 January 2012, will have to divide their assets under the new provisions, except for compensation rights that stem from an earlier date; these earlier compensation rights will still be covered by the ’old’ legal provisions.

The situation is rather complex and sound legal advice is often needed to sort out things.

Advice you can trust

If you would like to know more about what this means for your situation, or you have another question about international divorce and the division of assets, please contact me.