When can you sell a property in Tyrol in the event of a divorce ?

I would like to answer these and similar questions in this blog post and reveal how you can save a lot of money in the process.

 

Regarding the above question, it must be said that the relevant norms such as the Marriage Act, the Registered Partnership Act, the General Civil Code and the Condominium Act are federal law and apply equally to Tyrol or the rest of Austria.

 

It should also be noted in advance that the courts in divorce law decide on a case-by-case basis and according to equity.

 

A fundamental distinction must be made between a divorce by mutual consent and a contested divorce (i.e. with divorce proceedings).

 

With regard to the contentious divorce, which I would like to discuss first, the following must be said in advance for the understanding of the uninitiated: At the beginning there is the divorce petition, which is filed with the court having jurisdiction over the subject matter and location. This is followed by a court judgement. After the court decision has become final, there is a year in which the property can be sold. Once this year has elapsed, the judicial partition proceedings follow. The principle of the partition proceedings is separation; co-ownership is to be terminated.

 

As far as the property is concerned, it is often more cost-effective for the spouses to reach a settlement and sell the property before the divorce proceedings.

 

In a divorce decree , it only comes out whether the marriage is divorced due to sole, predominant or equal fault (if it is a fault divorce according to 49 EheG). Then there is 1 year (deadline!). In this year after the judgement, the spouses have time to agree on the division, then the judicial division proceedings begin. In this phase, the divorce court needs the market value of the property in any case.

In the division proceedings, a party may file a petition for the division of the marital property (marital debts and savings) at the beginning of the proceedings or earlier.

This procedure can be very expensive, because the lawyer's fee is calculated according to the amount to be divided, which in Tyrol can be half a million or a million euros (real estate, cars, movable property, money, etc. in total).

The lawyer's fee for half a million euros of assets to be divided is e.g. 1,814.55 euros net per hour plus 20% VAT + court fees, for one million euros of assets to be divided e.g. 2,189.55 euros. Very few proceedings are therefore fought out for reasons of cost. All in all, including expert opinions, costs can add up to 50,000 euros. Complex issues, such as the so-called gain (investments in the property) can cause the costs of the proceedings to explode even further, including the expert's report.

 

In the case of a sale of the property outside of the proceedings, the sales price achieved is often more than the costs for an estate agent. Compare the example above, where approx. 50,000 euros in procedural costs can be offset by an estate agent's commission of 15,000 euros plus 20% VAT.

It is often the case that one of the spouses cannot afford a division procedure, be it in contentious proceedings or in a divorce by mutual consent, because the one who gets the property has to make an equalisation payment, and often he or she cannot do that.

 

Therefore, even if you are already in the process of dividing your property, it is advisable to hire a real estate agent.

 

The spouses can also settle at any stage of the divorce proceedings, only before the start of the division proceedings it is cheaper. This is because legal costs are to be borne by the spouses in any case.

A divorce by mutual consent according to § 55a EheG is to be distinguished from a contested divorce under the following conditions:

• the marital partnership has been dissolved for at least half a year
• the spouses both admit to an irremediable breakdown of the marital relationship
• there is agreement between the spouses on the divorce

A divorce by mutual consent must always be concluded with a divorce decree; a divorce settlement can be prepared beforehand, but must be concluded in court.

The marriage may only be divorced if the spouses conclude a written agreement, inter alia, on the legal property claims in relation to each other for the case of divorce in court, which includes that they agree on the division procedure.

In a divorce by mutual consent, the division proceedings, which also involve the property, are settled in one with everything else concerning the divorce.

 

In the case of a divorce by mutual consent, the spouses must have made the arrangements for the divorce by mutual consent before going to the divorce court or agree before the divorce court on how the spouses will settle it.

Regarding the sale of real estate, it is also advisable to consult a real estate agent beforehand, because the spouses can also sell before they divorce by mutual consent, because then the spouses can say before the divorce court that everything has already been divided regarding the real estate and that no further settlement is needed in this regard.

In this phase it is recommended that the spouses determine with an estate agent what they want to do with the property. The market value of the property should be determined; a report by a court expert is not absolutely necessary for this.

A sale of the property is often the more effective method, because when a spouse takes over the property, the question often arises: "Can I afford to take over the property?

I would like to explain this affordability or non-affordability of the property with the following example:

It is assumed that a property was bought shortly before the divorce for 500,000 euros. A loan of 300,000 Eruo was taken out and this was secured with a lien by the bank. 300,000 Euros remain registered as a lien in the land register. These debts of 300,000 euros would have to be divided up again. In the example, one partner would receive half of the value of the property of 250,000 euros, has debts of 300,000 euros, and thus has a minus of 50,000 euros. If this is not affordable, it makes sense to sell the property, cover the debts from the proceeds of the sale and find an agreement on the rest.

Even if there is little or no debt, one of the spouses gets the property and would have to pay the other spouse 250,000 euros, which the spouse taking over the property often cannot finance.

It is therefore often better to agree on a joint sale, then both spouses will receive 500,000 euros in the case assumed above, and after repayment of the loan of 300,000 euros, each will still receive 100,000 euros. Therefore, one should sell out of court.

The above model does not take into account tax effects such as any real estate income tax that may have to be paid.

The matter can become even more complex if, for example, a very large, expensive piece of land, for example in a very good location in Innsbruck, was brought into the marriage by one spouse and an inexpensive building was erected on it by the other spouse or jointly.

It must also be said that everything that has been said so far applies to the matrimonial flat or house, at most to a weekend property that is used jointly, which would have to be examined more closely from a legal point of view in the specific case.

Another special case can be when rented real estate, e.g. an apartment building or a large number of flats, is assessed as a business of one spouse. This can also be a special case that would go beyond the scope of this blog. For the spouse who is the owner, it is therefore advisable not to keep the apartment building or the flats as a vacancy but to rent them out.

The case may be different if the spouses are joint owners of the flat house or these flats.

 

 

The third case after contested and amicable divorce would still be:

The spouses agree to separate de facto, but the marriage remains on paper, but even in this rarest of cases it will be advisable to sell the property at some point, because no one will want the other spouse to live in the marital home with the new one and pay rent, running costs or a loan for it. However, since this case hardly ever occurs in practice, I will not go into it in detail.

All of the above also applies to registered partnerships under the so-called Registered Partnership Act (EPG), here the Marriage Act (EheG) is applied analogously.

A distinction must be made between this and simple cohabitation: here, marriage law does not apply. It does not matter whether two strangers jointly own a property or two partners living in a cohabitation. Under certain conditions, the cohabitation can also be regarded as a civil law partnership (Gesellschaft Bürgerlichen Rechts, GesbR), but explanations on this would go beyond the scope of this blog article.

No kinship arises through cohabitation and thus no maintenance and apportionment obligation under the Marriage Act.

Only general civil law provisions on co-ownership or, in the case of condominium ownership, e.g. the special provisions of the Condominium Act on the partnership of owners apply.

Overall, the partners in the cohabitation can sell freely together, as they are co-owners. Or, in the case of simple co-ownership, one of the partners can bring an action for partition. In the case of an action for partition, if there is no settlement, the property is auctioned off.

 

To sum up:

• You want to sell a property in the event of divorce - you need to know at what stage
• the biggest advantage of selling the property outside of court proceedings is that the parties themselves can determine the modalities,
• that the sale of real estate is more cost-effective,
• one spouse is not unilaterally burdened with the payment,
• one spouse is not unilaterally burdened with a loan.

 

With regard to the sale of real estate, it is advisable to engage a real estate agent at an early stage for the following reasons:

1. by attempting to sell yourself without the right price, you "ruin" the property on the market
2. through their own attempts to sell, it often seeps through to prospective buyers that it is a divorce property, which owners more or less have to sell, which additionally puts downward pressure on the price

You can also read my blog article on selling a house discreetly, so no one will know:

https://www.arealita.at/allgemein/haus-diskret-verkaufen-so-bekommt-es-niemand-mit/

3. The achieved sales price therefore often pays more than the costs for the real estate agent in the case of a sale with a real estate agent. Compare the above example in the blog post where approx. 50,000 euros in procedural costs can stand in the way of an estate agent's commission of 15,000 euros plus 20% VAT.

 

If you have any questions or need further information, please do not hesitate to contact us by e-mail(immobilien@arealita.at), by phone(+ 43 512 580 242) or via the contact form (click here!).

Yours sincerely,
Yours sincerely, Bernhard Großruck