How to divide shares in housing construction during a divorce in 2021

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The process of divorce for both spouses becomes psychologically difficult if the latter were unable to reach agreement on the division of jointly acquired property. The situation becomes even more complicated if they are faced with the question of how to divide the unfinished house during a divorce. This piece of real estate has a number of features and difficulties associated with its division as part of the divorce process, and, unlike the division of a residential building that has already been put into operation, the division of unfinished real estate will require some tinkering.

How is property divided?

The Family Code of the Russian Federation establishes equal rights of spouses in relation to property acquired after the official registration of relations with the civil registry office (Article 34 of the RF IC).

Expert opinion

Stanislav Evseev

Lawyer. Experience 12 years. Specialization: civil, family, inheritance law.

The only exception can be property that was transferred to one of the spouses before marriage, was donated (there is an act of donation) or it was inherited.

In judicial practice, there are cases of deviation from the general provisions of the RF IC in favor of parent-guardians of minor children.

In situations where it is possible to prove the absence of financial investments in the purchase of real estate during marriage without good reason.

How to recognize ownership of unfinished buildings?

The court said: “Under paragraph 3 of Article 222 of the Civil Code of the Russian Federation, it is possible to recognize the ownership of the ONS. The following conditions must be met:

1) The plot is owned (there are rights to build on it).

2) On the day of going to court, the ONS complies with all the norms and requirements that apply to this object.

3) If the preservation of the object does not violate the rights and legally protected interests of other persons and does not create a threat to the life and health of citizens.”

The court does not pay attention to whether the ownership of the object is registered or not. It is considered jointly acquired (38, 39 RF IC).

As explained in paragraph 30 of the resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated April 29, 2010 No. 10/22 “On some issues arising in judicial practice when resolving disputes related to the protection of property rights and other property rights ", in accordance with Article 130 of the Civil Code of the Russian Federation, unfinished construction objects are classified by law as real estate. Ownership of an unfinished construction project may be recognized by a court decision.

In one case (Determination of the Supreme Court of the Russian Federation No. 19-KG 19-27 of March 24, 2020), the Supreme Court of the Russian Federation said: if there is no registration of the right, the court has the right (not the obligation) to offer to appoint an examination.

Unfinished house - legal status and regulatory features

Current legislation defines an unfinished house from two positions:

1. Like materials and costs . This means that the construction is at an initial stage and does not have permits, registration or any other documents confirming the status of a “residential building”;
2. A property of a certain degree of readiness . In this case, it is necessary to have documents, preferably a cadastral number, in order for the building to obtain the status of “residential real estate”.

In fact, a fully finished object that has simply not been officially put into operation can have the status of “unfinished”.

In the absence of documents, the court may order a special examination to determine the condition of the construction project, its type, the remainder of the work and the possibility of dividing it between spouses.

Legal status of an unregistered house

From a legal point of view, an unregistered house during a divorce is considered an unfinished construction project. The degree of readiness of the building does not matter in this case. In court, a home is recognized as real estate and is divided in half between spouses.

Depending on the readiness for use, the house can be considered as follows:

1. As a full-fledged real estate property. In this case, documents for the house must confirm the status of residential real estate. This category also includes finished residential properties that have not been put into operation.
2. As expenses and materials. We are talking about the initial stage of construction, when payment for design and estimate documentation was made and material was purchased. In this case, the future house does not have the status of a residential property, but the division will be carried out equally.

If at the time of divorce the house is not documented, it must be recognized as a residential property in court. After the procedure is completed, the spouses will be able to divide it, taking into account the existing circumstances.

Is it possible to divide an unfinished house during a divorce?

The possibility of dividing an unfinished house is determined by several factors:

• the source of funds for which the building was purchased or erected;
• degree of readiness of the object;
• availability of documents for property;
• possibility of technical and actual allocation of shares.

Analysis of these factors will allow us to divide an unfinished house and take into account all the nuances of this process.

Source of funds

The source of funds for which the building was purchased can be personal, joint, borrowed and government funds.

A house is considered to be built with personal funds if the following were used in its construction:

• inherited money;
• savings collected before marriage registration;
• donated money.

If the source of funds is recognized as personal, then such a house will not be divided between the spouses.

When using joint funds, the house is subject to division equally if both spouses can confirm their share (costs).

Important! If the husband or wife could not invest money in construction due to illness, temporary disability, lack of income due to child care or housekeeping, etc. – the court also recognizes their right to property.

When purchasing with borrowed funds, division is also possible, but the second spouse may demand division of the joint debt.

This may be a joint payment of loan funds or a refund of part of the money already paid for construction. Including for the purchase of building materials, hiring workers, etc.

The last option is to purchase with public funds, in particular, maternity capital. In this case, the unfinished house, even before the completion of work, is divided by law between parents and their children into shares.

It is impossible to deprive any of the parents of a share; only redemption by mutual consent is permissible. For more information about the division of real estate acquired with maternity capital funds, read this article.

Readiness degree

This characteristic directly affects how an unfinished house will be defined : materials/expenses or a property of a certain degree of readiness.

In this situation, in the absence of documents confirming the status of construction, the court appoints an independent examination.

The main task of the examination is to establish the real state of the building, as well as to establish the scope of work for its completion, including its cost and timing.

Availability of documents for the house

The main document that proves in court the legal status of an unfinished house is a cadastral passport.

The absence of papers on the assignment of a cadastral number actually deprives the building of the status of property and makes it difficult to divide it according to the norms of the current legislation.

In addition, ownership of a house can also be registered as an unfinished object, but such registration is most often carried out for the sale of the object.

If there is no cadastral passport, then the property rights of the spouses and the fact of investing joint funds in an unfinished house will be confirmed:

• documents for the land plot (registration certificate, purchase and sale agreement, municipal resolution on the allocation of the plot);
• building permit from the municipality;
• construction contracts, receipts for the purchase of building materials, acceptance certificates for completed work.

There are precedents in the judicial practice of the Russian Federation when a Supreme Court judge sent a case on the division of an unregistered house for review, since he did not consider the lack of a cadastral number to be a reason for its division, even if there was an actual possibility of allocating shares.

In cases where such a technical possibility does not exist, regional courts have more than once defined construction as materials/expenses.

It is important to take into account paragraph 30 of the resolution of the Plenums of the Supreme Court of the Russian Federation and the Supreme Arbitration Court of the Russian Federation No. 10/22. “On some issues arising in judicial practice when resolving disputes related to the protection of property rights and other property rights” (dated April 29, 2010), the absence of a cadastral passport is not defined as an obstacle to including a specific unfinished construction project in the list of jointly acquired property.

As a result, the property rights of both spouses are recognized. The only obstacle to division may be the lack of technical ability to allocate shares.

Possibility of actual allocation of shares

The technical ability to allocate shares is the main condition for the actual division of this type of property.

If it is impossible to fulfill it, the court will award monetary compensation to the spouse for the alienation of part of the building in favor of the other.

The possibility or impossibility of dividing an unfinished house is determined on the basis of the conclusion of a construction and technical examination.

Experts, having established the possibility of dividing a house, reflect in their conclusion all possible options for dividing and the work necessary for this:

• the amount of construction work required for the actual division;
• arrangement of separate exits, isolation of rooms;
• summing up communications.

Availability of permits

Having documents for a house allows you to understand how to properly divide an unregistered house during a divorce. The cadastral passport is the main document for an unfinished house during the trial. Its absence deprives a specific building of its legal status, which significantly complicates the division procedure between spouses. In this case, confirmation of the investment of family funds is required. Such confirmations include:

• papers for a plot of land;
• permission to carry out construction;
• concluded contracts with construction companies, cash receipts for the purchase of materials.

The possibility of actual division of an unfinished house may serve as a basis for reviewing the case even in the absence of a passport for the house.

Methods for dividing an unfinished house

There are two main ways to divide an unfinished house: through the court and voluntarily.

The second option involves concluding a settlement agreement on the division of property on conditions favorable to both spouses in court or a pre-trial agreement on the division of property.

The division of an unfinished house during a divorce can be done by the spouses voluntarily or through the court.

Equal allocation of shares between spouses is possible only taking into account the recognition of the building as an unfinished construction project and taking into account norms that do not contradict the current legislation of the Russian Federation.

By agreement

Voluntary division before trial does not require the intervention of court representatives in the discussion process. And during the court hearing, the judge only clarifies the agreement of the parties to the terms of the agreement and recognizes it as valid in the absence of violations of the rights and interests of third parties.

Due to the specific status of unfinished real estate, legal difficulties are possible when dividing an unfinished residential building:

• determining the real possibility of dividing property;
• the impossibility of independently assessing the cost of work and materials if there is no possibility of physical division.

If there are disagreements on the above points, the spouses have the right to independently order a construction and technical examination or file a claim in court for the division of property.

Section nuances

You need to understand, if the house is self-built, what happens when you divorce such an object. Based on certain factors, the division of an unfinished house occurs as follows:

• taking into account the main source of money for construction;
• based on the degree of readiness of housing;
• taking into account the availability of a package of permits;
• the possibility of dividing an object into shares, both technically and actually.

These criteria are considered basic, which indicates their importance during the division of property between spouses.

How to divide shares in housing construction during a divorce: procedure

Basically, the court is subject to division of real estate that is owned by one of the spouses. Residential premises in the houses of a housing or housing-construction cooperative are also subject to division, for which the share contribution has not been fully paid and the spouses have not acquired ownership rights. Let's look at how to divide shares in housing construction during a divorce.

Step 1 – Draw up a statement of claim for the division of shares in housing construction. There is no need to delay, since the shares of the spouses are determined by market value, which may change over time.

Step 2 – Go to court with a claim for division of shares. You can file a claim:

• Simultaneously with the divorce procedure;
• After the settlement, such a claim can be filed within three years, and if the transaction is contested, within a year;
• During marriage.

Step 3 – Wait for the decision to be made in the legal proceedings.

Let's look at an example . The Ivanovs purchased a one-room apartment in an apartment building that had not yet been commissioned in 2013. A year later, the couple divorced, but the spouses did not file a claim for division of shares in the unfinished house. Two years later, in 2016, the house was put into operation. In 2021, ex-husband Ivanov Yu.A. began to live in this apartment with his new wife and changed the locks on it. From that moment on, the rights of his ex-wife were violated and she has three years to sue for her share in the apartment.