Insights

How to divide the divorce between the parents of both parties before marriage in Ningbo

Ningbo Author：LuXu WANG

Before marriage, each set of parents contributes a portion of the funds to purchase the marital home, and the property title is registered in the names of both children. During a divorce, both sets of parents typically seek to protect their respective interests based on the proportion of their contributions—while this stance is understandable, the legal rules governing such matters are not as straightforward as simply returning assets in proportion to each party’s contribution. The conclusion starts with the following: if the parents of both parties jointly contribute to the purchase of the house before marriage and the property right is registered in the name of the children of both parties, it is generally recognized as the common property of the husband and wife and is divided according to the common property rules; the contribution of both parents will be considered during the division, but not necessarily according to the proportion of capital contribution. If the intention is to fully align equity interests with the proportion of capital contributions, this should be achieved through a written agreement and by registering the respective shareholdings.

1. Legal Basis and Regulatory Framework

1. Determination of the nature of parental funding. Article 29 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Code of the Civil Code of the People's the People's Republic of China of China stipulates: "Before the parties get married, if the parents contribute to the purchase of houses for both parties, the contribution shall be recognized as a gift to their own children, unless the parents clearly indicate that the gift is given to both parties. After the parties have married, if the parents contribute funds for the purchase of a house for both parties, such contributions shall be handled in accordance with their agreement; in the absence of an agreement or where the agreement is unclear, they shall be handled in accordance with the principles set forth in Article 1062, paragraph 1, item 4 of the Civil Code."

2. Rules on marital property. Article 1,062 of the Civil Code stipulates that property acquired during the subsistence of the marital relationship is jointly owned by the spouses, while Article 1,063 provides that the premarital property of either party shall be regarded as individual property. Although the house is purchased with capital contribution before marriage, if it is registered in the names of both parties, the ownership is shared by both parties; Article 1087 of the Civil Code shall apply at the time of division: the common property of the husband and wife shall be disposed of by agreement between the two parties at the time of divorce, and the agreement fails. In case of failure, the people's court shall make a judgment according to the specific circumstances of the property and in accordance with the principle of taking care of the rights and rights and interests of the rights of the rights of the rights of the children, women, women and.

3. The combined effect of the two rules. Before marriage, both parties' parents' investment registration under the names of both parties forms two levels in nature: "the gift from each parent to their own children + the joint registration of both parties' children": the contribution share can still be used as a reference factor for the division between the children, but the house ownership has entered the common property division framework as a whole because it is registered under the names of both parties, and the court does not mechanically deal with it according to "who pays how much.

2. Situation breakdown: Different registration methods, completely different rules.

Scenario 1: Registered in the names of both parties (the subject of this article).It is generally regarded as marital joint property and shall be divided as such, with the parents’ contribution ratio serving as an important reference rather than the sole criterion. In cases of long-term cohabitation and joint mortgage repayments, the property is typically divided equally, or one party receives the property while the other is compensated with a monetary equivalent.

Scenario 2: Registered under the name of one party. If parents provide funds before marriage and the property is registered solely in the name of their own child, it is generally deemed a gift to that child individually, and the property constitutes the child’s premarital personal asset (if the other spouse participates in repaying the mortgage, they are entitled to compensation for the portion of the mortgage paid and any corresponding appreciation in value).

Case 3: It is registered in the names of both parties and there is a written mutual agreement.When purchasing a property, both parties and their parents should enter into an agreement and clearly specify the respective ownership shares (e.g., 50% each or in proportion to their contributions). Upon divorce, the property shall be divided according to this agreed-upon shareholding arrangement, which provides the strongest legal effect for locking in each party’s financial contribution.

Case 4: One parent contributes significantly more than the other.Where property is registered in both parties’ names but the contributions differ significantly, during divorce division, a reasonable tilt may be given to the party who contributed more; however, the extent of such tilt depends on comprehensive factors such as the duration of the marriage, mortgage repayments, and child custody arrangements, and is not necessarily proportional.

Scenario Five: Joint mortgage repayments after marriage. If a property is purchased before marriage and the mortgage continues to be repaid with marital joint property after marriage, the portion of the mortgage payments made during the marriage, together with any corresponding appreciation in value, shall be treated as marital joint property and shall be separately calculated and compensated for during the division of assets.

3. Dispute over the nature of the contribution: gift or loan?

Whether a parent’s contribution constitutes a gift or a loan directly affects whether that contribution can be “recovered”:

  1. Judicial presumption: Where parents provide funds prior to marriage, such contributions are presumed to be gifts to their own child unless expressly stated otherwise as a gift to both spouses—this is the rule established in Article 29 of the Judicial Interpretation. Consequently, parental contributions do not automatically become a claim against the other party upon the couple’s divorce.
  2. Proposition that borrowing needs evidence: if parents claim that capital contribution is borrowing, they must provide evidence such as debit note, transfer note, written agreement, etc.; only transfer record is usually not enough to overturn the presumption of gift. If parents only sign the IOU and reverse the date when their children divorce, the proof is weak and the court examines it strictly.
  3. specify the exception of both parties to the donation: if the parents clearly indicate that both parties to the donation (such as clearly stated when the contribution is made, the registration in the name of both parties can be considered as a factor but not sufficient evidence), the contribution will enter the common property pool. the significance of
  4. to the child: for the party who receives the capital contribution, if it proves that "the parent's capital contribution is a gift to his own individual", the corresponding share can be inclined in the division; for the other party, if the capital contribution is identified as a gift to both parties or used for joint purchase, the division of the house will be treated as common property.

Practical tips: When parents contribute capital, they must transfer money through the bank and note the purpose (such as "purchase capital contribution", "gift to children" or "loan" on the contrary), so as to avoid the difficulty of proof in cash delivery; if they want to clarify the relationship between creditor's rights and debts, they should sign a written IOU and complete it at the time of contribution, instead of making up afterwards.

The determination of the nature of capital contribution also depends on "who claims and when": in divorce proceedings, the parents of the party who accepts the capital contribution usually advocate "giving to their own children" to oppose the division according to common property; the other party and their parents may advocate that the capital contribution is a loan or a gift to both parties. The court’s order of review is as follows: first, it examines whether there is a written agreement (such as a promissory note, gift agreement, or notation); if none exists, it applies the presumptive rules set forth in the judicial interpretation (i.e., premarital contributions are presumed to be gifts to one’s own child). The determination of "clear loan and real gift" is more controversial-if there is only a debit note but no real loan transaction, or if the time of formation of the debit note is abnormal (near divorce and supplementary signature), the court may deal with it as a gift. For parents, if the capital contribution is indeed a loan, it is important to keep the debit note, transfer notes and evidence of the use of the funds at the same time; if it is a gift and you want to give it only to your children, the transfer notes and written instructions are the most direct evidence, and cash delivery can hardly prove the subject and nature of the capital contribution.

Considerations in 4. Division: How the Court "Discerns"

In cases where a house is registered in the names of both parties, courts typically proceed with divorce property division according to the following approach:

  1. Assessment of the present value of the house: based on the market value at the point of division (after deducting the remaining loans), it can be priced or commissioned by both parties.
  2. Contribution: As an important reference, the contribution ratio of the parents of both parties should be appropriately inclined when there is a great disparity in contribution; however, if the marriage lasts for a long time, repays more loans together and pays more together, the weight of the contribution ratio will decrease.
  3. The duration of marriage: In short-term marriage (such as flash marriage and divorce), the weight of parental contribution is relatively high; in long-term marriage, the degree of property mixing is high and tends to be equal.
  4. Care for children, women and no-fault rights: The statutory adjustment principle of Article 1087 of the Civil Code plays a role in individual cases, and the housing needs of the party directly raising the children, whether it is at fault or not, etc. may affect the housing acquisition and compensation amount.
  5. Property Appreciation and Mortgage Repayment: In cases where a property is purchased before marriage but repaid jointly after marriage, the compensation for the joint repayments shall be calculated based on the formula “Appreciation Index × (Joint Repayments ÷ 2)” (see the Ningbo Practical Guidance for details).

The typical outcome of the division is that “one party receives the property, and the other receives a cash compensation.” The amount of the cash compensation is calculated as the current value of the property divided by the parties’ respective shares (e.g., 50% each), adjusted in accordance with the aforementioned factors. The party who obtains the property must have the ability to continue making mortgage payments or to provide a one-time compensation; otherwise, the court may order that the house be sold and the proceeds divided.

5. Operational steps

  1. Gather and organize proof of contributions: bank transfer records, receipts, transaction statements marked “housing purchase contribution,” the housing purchase contract, and payment documents for contributions made by both sets of parents; clearly identify the amount and timing of each party’s contribution.
  2. Confirm the registration and agreement of property right: get the registration information of real estate, confirm whether the registration mode is common, shared or separately owned; check whether there is written investment agreement, shared agreement or prenuptial agreement.
  3. Assess the present value of the house: determine the present value of the house through the appraisal agency or market comparison, and obtain the net value after deducting the remaining loans.
  4. sort out the situation of loan repayment: the amount, source (salary account or parents' account) and corresponding value-added of joint loan repayment after marriage.
  5. Division through negotiation or litigation: First, negotiate the ownership of the property and the compensation arrangement; if no agreement is reached, submit to the court evidence of contributions, mortgage repayment records, and a report on the current market value of the property, detailing each party’s financial contributions and any relevant factors warranting a favorable allocation.
  6. Transfer or Compensation: Process the property ownership transfer and payment of the compensation amount in accordance with the agreement or court judgment, and simultaneously handle the relevant bank procedures if a loan is involved.

There are several other types of capital contribution forms that need to be specified separately: if one of the parents pays the down payment before marriage, and the loan is jointly repaid by the young couple after marriage and registered in the names of both parties, the contribution of capital contribution and the contribution of loan repayment shall be calculated separately -- the down payment shall be handled according to the rules of parental capital contribution presumption, and the joint repayment and its appreciation after marriage shall be compensated according to the rules of common property; if one of one of the parents fully contribute to the decoration or purchase of household appliances, decoration capital contribution is generally included in the housing value consideration (decoration attached to the house), home appliances and other movable property can be claimed according to the actual capital contribution share. The party advocating the contribution of the contribution should make the "contribution time-amount-purpose-transfer path" into a table and attach a voucher, so that the court can see the composition of the contribution at a glance, which is more convincing than the general claim that "my family has a big head.

6. common mistakes

Mistake 1: Dividing the property according to each parent’s respective contribution ratio. positive solution: registration under the names of both parties is generally treated as common property, and the proportion of capital contribution is only a reference factor. The court does not divide it mechanically according to proportion, but also considers factors such as the length of marriage, loan repayment, child support, etc.

Myth 2: Whoever has a large down payment will own the house to his child.Correct answer: If the property is registered in both parties’ names, it is considered joint property, and the party who obtains the property must pay the other party a monetary compensation; the party who contributed more may only receive a slight preferential adjustment in the division ratio.

Misunderstanding 3: Parents' contributions can be returned at any time.Correct answer: Pre-marital contributions are generally presumed to be gifts to one’s own child, and parents may not arbitrarily “reclaim” such funds upon the child’s divorce; if claiming a loan, supporting evidence such as a promissory note is required, and this must be documented at the time of the contribution.

Misconception 4: If the property is registered in both parties’ names, it automatically means each owns 50%, and parents’ contributions are for nothing. positive solution: registration in the name of both parties is not equal to complete equal distribution-factors such as the proportion of capital contribution and the length of marriage will affect the actual division ratio; if you want to lock in the share of capital contribution, you should realize it through written agreement and registration share when buying a house.

class case reference: the house which is funded by parents before marriage, signed in the name of both parties and registered in the name of both parties, and repays the loan together after marriage, in principle, it will be treated according to the joint property of husband and wife when divorce is divided, with emphasis on accounting the joint repayment and corresponding value-added after marriage. Ningbo local courts have similar treatment: in the case of property dispute after divorce between Chen Mou and Xu Mou (Haishu District People's Court of Ningbo City, Zhejiang Province,(2014) Yong Hai Xi Min Chu Zi No. 141), the value-added part of the house jointly repaid after marriage is calculated according to the proportion of the joint repayment to the purchase cost, and one party is ordered to compensate the other party for 129562.50 yuan. That is, the real estate under the name of the registered parties shall be divided according to the common property rules, and the joint repayment and value-added after marriage shall be compensated, rather than the mechanical return according to the proportion of capital contribution. Trial Court: Haishu District People's Court of Ningbo City, Zhejiang Province Case No.:(2014) Yong Hai Xi Min Chu Zi No. 141

7. FAQ

There is a great disparity in the proportion of capital contribution of both parents, and the house is registered in the names of both parties, can it be divided according to the proportion of capital contribution?

Not necessarily. The house is divided according to the common property, and the proportion of capital contribution is an important reference for the court: if the capital contribution is very different and the duration of the marriage is short, it may be inclined to the capital contribution of more than one party. If you wish to specify the ownership shares from the outset, enter into a written agreement on tenancy-in-common at the time of purchase and register the respective shares.

Is money provided by parents a gift or a loan? Can the parents claim repayment in the event of divorce?

In the absence of evidence such as a promissory note, the transfer is generally deemed a gift; contributions made before marriage are presumed to be gifts to one’s own child. If the parents claim that the funds constitute a loan, they must provide evidence of an agreement to lend (such as a promissory note, a remittance note, or a written agreement), and such agreement must have been established at the time of the funding. In practice, it is difficult for parents to get support for claiming claims by signing IOUs after their children's divorce.

registered in the name of both parties, but has not received a marriage certificate, how to break up?

During the cohabitation period of unregistered marriage, the jointly funded house purchase is registered in the name of both parties, which belongs to the common property rather than the joint property of husband and wife. The division is handled with reference to the division rules of the common property, and the weight of the proportion of capital contribution and the registered share is higher. It is recommended that such cases be dealt with as a matter of priority in consultation with the share of capital contribution and registration.

The house is awarded to one party, and the other party takes the discount. How to calculate the discount?

The discount is generally calculated by "the present value of the house × the proportion of the share due", and then adjusted by taking care of the children, the woman, the party without fault and the contribution of capital contribution. The present value of the home is the appraised or negotiated value net of the remaining loan. If the buyer lacks sufficient funds, they may negotiate installment payments and agree on default interest.

8. Lawyer's Practical Insights

The parents of both sides each give a part and the house is registered in the name of the young couple. In this situation, the most common expectation is to divide according to the proportion of capital contribution, but it is not necessarily so in practice. The court will first determine that the house belongs to the joint property of the husband and wife, and then combine the contribution of both parties, the duration of the marriage, the repayment of the loan, the presence of children and fault to adjust, the parents' contribution is only one of the factors. Therefore, the first thing you have to do is to make clear how much, when and for which part both parents have paid, and keep all the transfer vouchers, chat records and written instructions. Don't let the amount of capital contribution stay in the state of verbal recognition.

The nature of capital contribution is the real battlefield of this kind of cases: whether it is donation, loan, or conditional capital contribution for house purchase, the judgment result directly affects the way of compensation. If the parents only bought a house for the young couple at the beginning, it is usually treated as a gift, and the corresponding share goes into the common property; if it is stated that there is a loan and a repayment agreement, it may be returned as a debt claim. Therefore, the core of the evidence is the written documents and transfer notes at the time of the contribution. On the other hand, if it is still in the marriage preparation stage, the safest way is for both parties to write the capital contribution and share directly into the written agreement, and reflect the share at the time of registration, and use the agreement and registration to lock up the rights and interests, instead of waiting for the divorce to rely on afterwards memories to fight.

When negotiating, you can put your parents' contribution on the table, but don't use it as the only bargaining chip. The duration of the marriage and the contribution of repayment will also be valued. If one parent pays the down payment and the other pays the loan for many years, simply emphasizing that the down payment is ours may not be dominant. A more pragmatic approach is to talk about the ownership of the house and the amount of compensation: who wants the house, what amount to compensate the other party, who will continue to bear the loan, and when to cooperate with the transfer of ownership. It is easier to tie these four items into a whole than to compete for the proportion. It doesn't matter if we don't talk about it properly. We have prepared the parents' capital contribution evidence and loan repayment records, and we have the confidence to enter the lawsuit, instead of being led by the emotion of who pays and who speaks.

Before marriage, the parents of both parties contributed capital, registered in the name of both parties, legally "advanced common property, then talk about contribution adjustment": registration is the first basis of ownership, the proportion of capital contribution is an important reference for division, the length of marriage, loan repayment, children and fault factors jointly determine the final proportion. For one parent: the capital contribution must be bank transferred and the purpose of the note, want to lock in a written agreement and register the share; For one child: keep the capital contribution voucher, loan repayment record, explain the contribution according to the facts at the time of divorce, and strive for a favorable division and compensation scheme.