Insights

Ningbo house fell into negative equity, how to divide the divorce.

Ningbo Author：LuXu WANG

A client consulted: the couple bought a suite in Haishu District of Ningbo and repaid the loan together after marriage. Recently, the relationship broke down to divorce, a check of the house price found that the market value of the house is lower than the remaining loan, has become a "negative equity". The man wants a house, and the woman is worried that not only will she not be able to get the money, but she will also stick it upside down. How to deal with this situation?

1. legal basis

article 78 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Part of the the People's Republic of China Civil Code:

> If one of the spouses signs a contract for the sale of real estate before marriage, pays the down payment with personal property and makes a bank loan, repays the loan with the joint property of the husband and wife after marriage, and the real estate is registered in the name of the down payment payer, the real estate shall be dealt with by agreement between the two parties at the time of divorce. If no agreement can be reached in accordance with the provisions of the preceding paragraph, the people's court may decide that the real estate belongs to the registered party, and the loan that has not yet been returned shall be the personal debt of the registered party. The amount paid by the two parties to jointly repay the loan after marriage and the corresponding property appreciation shall be compensated by one party to the other party in the registration of real estate in accordance with the principle stipulated in the first paragraph of Article 10

87of the Civil Code.

Article 1062 of the Civil Code:

> The following property acquired by the husband and wife during the marriage shall be the common property of the husband and wife and shall be jointly owned by the husband and wife: ...... (V) other property that shall be jointly owned.

The first paragraph of Article 1087 of the Civil Code:

> In the event of divorce, the joint property of the husband and wife shall be disposed of by agreement between the two parties; if the agreement fails, the people's court shall make a judgment in accordance with the specific circumstances of the property and in accordance with the principle of taking care of the rights and interests of the children, the woman and the non-fault party.

2. core points

  1. the down payment of one party before marriage and the joint repayment of the loan after marriage shall still be handled according to Article 78 of the judicial interpretation.

Even if the present value of the house is lower than the remaining loan, the court usually still revalues the house to the registrant, and the remaining loan is borne by the registrant. The other party shall have the right to claim compensation for the payment of the joint repayment of the loan after marriage and the corresponding part, and shall not lose the right to compensation due to the depreciation of the house.

  1. When the house depreciates, the calculation basis of compensation remains unchanged.

Compensation = joint repayment of principal and interest after marriage ÷ housing cost x present value of housing x 50%. The present value of the house is low, and the compensation is reduced accordingly, but it is not equal to zero. If the present value of the house is lower than the cost, the compensation calculated by the formula will be lower than the increase in house prices, but the joint repayment portion should still be returned.

  1. When there is a large gap between the time of purchase and the time of marriage, the cost is calculated by the price of the house at the time of marriage.

Refer to the Jiangsu High Court's "Guide to the Trial of Family Dispute Cases": If one party buys a house before marriage, and the marriage time is long apart, the calculation of the cost of the house is based on the real estate price at the time of marriage, so as to protect the personal value-added of the buyer before marriage.

  1. Joint purchase of a house after marriage, divided equally by common property or by contribution.

If the property is a joint purchase after marriage, joint repayment, regardless of the rise and fall of house prices, are common property of husband and wife. Divorce is generally divided equally, taking into account factors such as contribution, child support, and fault.

  1. "do not deal with it temporarily" is not a long-term solution

the two parties can negotiate to continue to hold the property jointly after the divorce, and then deal with it when the house price rises. However, if the negotiation fails to enter the lawsuit, the court will usually deal with the division of the property together in the divorce case.

3. boundary conditions

  • if the down payment before marriage is shared by both parties, the property no longer applies solely to article 78 and may be considered to be shared or joint property.
  • If the post-marital repayment of the loan comes entirely from one party's pre-marital personal property or money explicitly given to the individual by the parents, the other party usually cannot claim repayment compensation.
  • If the property is registered in the names of both parties, it may involve a gift or a marital property agreement, and the division is different from the registration in the name of one party.
  • During the period of separation, one party repays the loan separately, which is still regarded as the joint repayment of the husband and wife, and the present value of the house shall prevail at the time of divorce.

4. operational steps

if you are a party involved in joint repayment after marriage:

  1. collect the purchase contract, loan contract and repayment flow to prove the amount of joint repayment after marriage.
  2. Apply for a home value assessment, or negotiate to determine the present value of the home at the time of divorce (even if it is negative equity).
  3. Advocate the value of the house at the time of marriage as the cost base, such as the purchase and marriage time gap is large.
  4. If the other party is at fault or you are raising children, advocate an appropriate tilt in the division.

If you are a premarital home buyer:

  1. keep premarital purchase contracts, down payment vouchers, premarital repayment records.
  2. If parents help repay the loan, it is recommended to make it clear through notarization or lawyer witness that the money is only given to their children.
  3. During the period of separation, try to avoid repaying the loan with the joint property of the husband and wife, and consider repaying the loan with the personal property before marriage.

5. common mistakes

myth 1: The house becomes negative equity, so you don't have to split it when you divorce.

Error. Negative equity is only the result of the division may be loss sharing, does not mean that the property is not treated. The court will still divide it according to law and determine the loan commitment and compensation.

Myth 2: joint repayment of loans after marriage can only be divided into value-added, can not share the depreciation.

Error. Article 78 of the judicial interpretation is expressed as "the corresponding value-added part of the property", but in judicial practice, the joint repayment part of the housing depreciation should still be compensated, but the amount of compensation is calculated at present value.

Misunderstanding 3: real estate certificate obtained after marriage is the common property of husband and wife.

Error. The criterion is the source of the purchase price and the time when the purchase contract is signed, not the time when the property ownership certificate is obtained. Buying a house before marriage is still personal property before marriage, even if it is licensed after marriage.

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practical Experience of 6. Lawyers

when the house price is lower than the remaining loan, the parties are most likely to panic: if the money is not available, do you want to pay it back? In fact, the real estate has become a negative equity, which does not change the basic idea of division, but changes the appreciation into depreciation. If one party makes a down payment before marriage and repays the loan jointly after marriage, the house generally belongs to the registered party, and the registered party deals with the joint repayment of the loan and the corresponding part. Therefore, if you panic, you still have to calculate the accounts and put the figures out before your emotions can be suppressed.

This kind of case first does two things: one is to find out the loan balance, the present value of the house and the original cost, and the other is to judge who will take over the house. Negative equity is most likely to be stuck on who wants the house and who backs the loan, so it is necessary to calculate both outcomes: the party receiving the house continues to bear the remaining loan, while making corresponding compensation or sharing to the other party. The evaluation price, loan contract and repayment record should be complete, so that the conversion will not have to say each other, and the more the calculation will become more and more rigid.

The most taboo under negative equity is the "who let go first who suffers" confrontation. The pragmatic idea is to see who has the stronger repayment ability and housing demand: those who need to continue to live can be flexible in compensation and repayment arrangements; If you just want to get out as soon as possible, you 'd rather have less than hard to carry the loan. If both parties are unwilling to take over, they should consider the disposal plan and subsequent loan responsibilities in advance, and do not delay the problem to the end of the supply, when the processing cost will be much higher, and credit and credit will also be implicated., These effects are difficult to eliminate later.