In the case of Re R (Deceased)  EWHC 936, a claim was brought under the Inheritance (Provision for Family and Dependants) 1975 Act (“the Act”) for reasonable financial provision...
Transferring Ownership Separation Divorce - French Law
It is usual for couples to buy property together, either as a permanent or holiday home, or even as an investment. However, when the relationship ends, the property is still owned by both. The way the property was purchased and is owned, and whether the couple is married or not, will impact the way that a property in France will be divided on separation.
The first step is to first check the title deed. This is necessary in order to determine whether a specific provision (called a Tontine clause) has been inserted in the deed, as this will impact what happens to the property.
No specific provision in the title deed
For unmarried couples, if their assets include a French property, it will make no difference whether they are French or UK residents. What matters is the way the title deed was drafted by the French notaire when the property was purchased.
If both partners’ names are mentioned in the deed, but there is no other specific provision about the ownership of the property, then it will be considered as being owned in “indivision” (the equivalent of a tenancy in common under English law). This means that both partners will be considered as owners in equal shares and, in the event of a separation or on the death of one of them, the property will be divided in equal shares. However, it is possible when making a purchase to state in the deed that different contributions have been made by the partners, in which case the property will be divided according to each of the partners’ contributions.
If one of the former partners refuses to sell the property, the other partner may decide to try and sell their share of the house, in which case they will have to grant a right of first refusal to the other joint owner.
In France, unlike in the UK, married couples can choose the way they will own their assets together. This applies to assets owned at the time of marriage and those acquired at a later date). This is known as a marriage regime and will impact the way the property will be dealt with on divorce.
The types of French matrimonial regimes available are:
The separation regime (the regime which a notaire will apply to a couple married in the UK). Any assets owned by the spouses before and during the marriage are managed as each sees fit. The only exception is the family home, which may not be sold unless both spouses agree, even if only one of the spouses is the owner. This matrimonial regime differentiates between what each spouse owns on the day of marriage and any property, assets, investments and income acquired by each spouse during their marriage.
The universal community of assets (communauté universelle). All assets owned by the spouses on the day of marriage as well as the assets they may acquire or receive by way of inheritance or gift during the marriage, become shared property.
The legal community of assets regime (communauté légale réduite aux acquets). If the spouses do not opt by contract for any other kind of marriage regime to apply, then by default all the assets they acquire during the marriage will be considered to be shared property. Whatever each owned before the marriage remains their own property.
As far as married couples divorcing in the UK are concerned, even though there are no marriage regimes per se in England, the French notaire, for practical reasons, will consider them as married under an English “separation of assets” marriage regime and will divide the property according to the divorce Court order. The couple therefore needs to make sure that the French property was discussed during the divorce proceedings and that specific provision is made in the divorce Court order i.e. whether it is to be sold or to be transferred into the name of one spouse only.
For married couples divorcing in France, the notaire must divide the property in accordance with the terms of the marriage regime of the spouses in France, unless the divorce is by mutual consent where the parties decide how the property will be divided. In this case, the notaire will have to draft the deed of transfer according to the former spouses’ decision as approved by the Court.
However, if there is no mutual consent, then the division of the property will be part of the division of all the assets according to the last marriage regime of the spouses. Hence, if you are married in France or a French resident at the time of your separation, you will have to figure out what regime will govern the division of your property in France.
In any event, except if you are married under the separation regime or if you divorce by mutual consent, the notaire will have to draft a deed of division of assets (acte de partage) pursuant to your marriage regime.
Specific provision in the title deed – the tontine clause
It is also possible that the couple, married or not, decided to buy the property by adding a tontine clause to the deed, equivalent to a joint tenancy under English law. In this case, the ownership status of the property is effectively in limbo until the death of the first partner, at which point the surviving partner is considered to have owned the whole property from the date of purchase. It means that, whilst both partners are still alive, there is no recognition of any shared ownership. Therefore, in the event of a separation, both partners/spouses must agree to a sale of the property, or for the tontine clause to be revoked if they wish to transfer it into one of the partner’s/spouse’s names only. In other words, if the couple cannot agree on a sale, neither of the partners/spouses would be entitled to apply to the Court for an order for sale. Hence, in such circumstances, there would be deadlock.
How we can help
If you are a separating couple and own a property in France, do not hesitate to contact us. We are experienced in liaising with French notaires on the transfer of property involving a separation or divorce.
Our work includes advising on the procedure to follow in the specific circumstances of each couple, liaising with the notaire throughout the sale/purchase/transfer process and reviewing the necessary documentation drafted by the notaire to ensure your interests are protected.