Couple and real estate, building your future together

Living together, whether you are married, in a civil union or in a common-law relationship, is not only the union of two people but also of two assets. For those who have not yet invested, this is the opportunity to take the plunge. Becoming a homeowner is a bit like "making your nest", while waiting for something else from the couple's life. However, it is not easy to find the right formula when you want to buy. Your notary will be able to find the right solution for each situation.

For those who don't want to wait

Buying in undivided ownership
When the deed of sale is signed, each person becomes the owner of the property, in proportion to his or her financial contribution (30/70, 50/50...). Be careful, it must be the real financial participation of each one! If you indicate in the deed a financing that does not correspond to reality (one person reimburses the totality of the loan for example), you could perfectly well be subject to a tax adjustment. The distribution therefore takes into account not only the personal contributions of each person, but also the contributions to the repayment of the loans. If nothing is indicated, the property is deemed to belong to each of you for half. Any subsequent change in the proportions is treated as a sale or donation and taxed as such.

• What to expect: To repay the loan, the banks recommend opening a joint account that will be used only for that purpose. In case of separation, it will be easier to trace the history of repayments of each. It is wise to foresee also in the deed of acquisition of the property, "a clause ofpreferential attribution". Thus, in the event of the death of one of the parties, the other party will have priority in buying back the deceased's undivided share from the heirs. If you are married: this is provided for automatically. If not, a specific clause must be included in the agreement. One caveat! The Civil Code states that "no one is obliged to remain in joint ownership". In case of disagreement, one of the undivided co-owners can ask the judge for a judicial sharing at any time. When one separates, the most classic solutions are the following: either one sells the property and recovers one's share of the price, or one buys back the share of the other in the building and becomes the sole owner.
• And in case of death? When you are in a civil union, the partner is not the heir of the other. A will must therefore be drawn up so that the surviving partner inherits the other's share of the property, without having to pay tax. Your notary can advise you on how to draw up this will.
  When you are cohabiting, you do not inherit from each other. Worse! We are considered by the law as strangers to each other. In case of death, the survivor does not inherit the share of his or her spouse. It is transmitted to his heirs. One finds oneself in undivided ownership of a part of the property with the heirs of the other (parents, brothers and sisters, children...). Not easy to manage!

Become partners by creating a SCI

You can also create a real estate company which will buy the property directly, thanks to the money brought by the two partners. The drafting of the statutes is an important point. Your notary, when creating the SCI, will advise you on the drafting of the operating rules and the choice of the manager. Here, the company is the owner of the building and the capital is divided into shares. You can therefore sell, buy or give your shares as you wish. The advantage of the SCI is that it avoids the risks of blockage that can occur with joint ownership.

• To foresee: For cohabitants, once the SCI has been set up for the purchase of a common home, in which each holds 50% of the shares, a cross dismemberment of the shares can be a good solution. With this mechanism, the two partners exchange theusufruct of their shares, i.e. each receives the usufruct of the shares whose bare ownership is held by the other.
• And in case of death ? In case of death of one of the two cohabitants, the survivor has automatically and without payinginheritance tax , the full ownership of half of the shares of the SCI and the usufruct on the other half. Having the usufruct of the totality of the shares (the enjoyment of the property), he can stay in the house or the apartment during his life, without worrying about being "kicked out". Crossed dismemberment can also be applied for PACS partners. There is not a great interest for the taxation because the partners are exempt from inheritance tax.

For those who have planned everything

You may be one of those people who choose to do things "in order". First you get married, then you buy or build. The status of the real estate purchased during your marriage will depend on the matrimonial regime chosen. This is something you should plan before you get married by going to your notary to get advice. Each person has his or her own family history and assets. It is therefore necessary to build the future taking into account these elements and to make a "tailor-made" choice.

Buying for two while married
Real estate and matrimonial regimes are closely linked. The status of the acquired property will therefore change according to the regime adopted.

• Under the legal system, each is deemed to own half of the property purchased after the marriage. If part of the financing comes from a donation or an inheritance received by one of the spouses, the notary will advise you to mention it in the purchase deed. In the event of separation, the spouse who financed the purchase in this way will obtain a "compensation" called a reward.
• Under the regime of separation of property, all property acquired before and after the marriage remains personal to each spouse. The property is the exclusive property of the one who financed it. In this case, it is strongly advised to buy in joint ownership with funds from both spouses. They will then be owners to the extent of their investment.
• Under the regime of universal community, you are both equal owners of the property, even if it was acquired by only one of you.
• Under the regime of participation in acquests, the functioning is identical to that of separation of property. In the event of a break-up, each spouse is entitled to receive half of the acquests of the other, i.e. half of the enrichment during the marriage.
  
• To be expected: Approximately 80% of couples do not draw up a marriage contract and end up married under the legal regime of community of acquests. Designed for general cases, the legal regime has its limits when a particular family or patrimonial situation arises. Thus, when one of the spouses has an independent profession involving financial risks (liberal profession, trader...), your notary will advise you to adopt a separatist regime for example. The marriage contract is signed at the notary's office before the wedding. It is however possible to change the matrimonial regime during the marriage, under certain conditions.

Buying alone while married

Under the regime of separation of property, a spouse who wishes to buy a property alone has the perfect right to do so. To do so, he or she simply needs to finance the property entirely with his or her own funds. In this case, the notarial deed will be signed by him alone. If you are legally married, it is also possible to buy a property alone, provided that you finance it entirely or mainly with your own money.

• And in case of death ? Following the death of one of the spouses, the survivor has a specific right to the principal residence, even if he or she does not own it. According to article 763 of the Civil Code, the spouse benefits for one year from the free enjoyment of the dwelling and the furnishings. This right is of public order. It is impossible to remove it by will! Then, it is the lifetime right to housing that takes over. This is a right of use and habitation that the spouse can enjoy until the end of his or her life, provided that he or she applies for it and informs the heirs. Beware, the spouse can deprive the survivor of this right by will. This is always a very bad surprise!

Rewards

Compensation may be due upon dissolution of the matrimonial regime, when a spouse's own patrimony has been enriched to the detriment of the community or when the community has been enriched to the detriment of a spouse's own patrimony.

For those who thought that...
everything that is yours is mine

Living with your spouse who owns the property
It is perfectly possible to live with your spouse who owns a house or an apartment, which he or she already had before you became a couple. Things were done like that, because it was more practical, closer to work... But, over the years, this situation has become a bit awkward. Come to think of it... in fact "you are at home", but not legally! Moreover, your financial involvement in the property is not in doubt. Sometimes, in addition to a participation in the current expenses, some go as far as opting for the status of co-owner, by buying half of the property. Not easy!

Building on a land owned by one of the spouses
It is also quite common to live in the other spouse's house, without really realizing it. Indeed, if you build and finance a house together on a piece of land given or bought before the marriage: it is your own property.
Even if you build the house together to live in, it will remain the property of your spouse.
There is a great principle in law that "ownership of the land carries with it ownership of the land above". According to article 546 of the Civil Code, the owner of a piece of land will be the sole owner of the constructions built on it, even if the financing was done by two people. As long as everything is going well within the couple, this should not be a problem.
On the other hand, in the event of death or divorce, the spouses' own property and the property held in common are separated and shared. It is at this point that the financial participation of the spouse will be discussed. By the game of "rewards", the patrimonies will be rebalanced because one of the spouses has contributed to the enrichment of the other's patrimony.

Stéphanie Swiklinski