The Supreme Court of the Russian Federation explained how former spouses can divide mortgaged property

Let’s start with the fact that according to the law, if a house and land are under a mortgage, then they can still be divided. In this case, all property owners will become joint mortgagors. This is exactly what the Supreme Court decided when considering a dispute between former spouses.

They bought land and built a cottage on the site. They spent maternity capital on improvements, and then took out a loan secured by this property. After the divorce, the property began to be divided, but the bank, as a mortgagee, was against it. And the Supreme Court explained that in such a situation the opinion of the credit institution is not taken into account.

Now let’s tell you the details of the dispute that was first noticed by the portal Right ru.

A couple from the Krasnodar region got married and had their first child. Five years later, the couple bought a plot of land and began building a house on it. A year later, the wife entered into a mortgage agreement — she took out a bank loan secured by land. A year later, the cottage was completed, and all the property was registered in the name of the wife. When registering a house, Rosreestr, in connection with a mortgage, imposed a restriction on it by force of law (Federal Law No. 218 “On State Registration of Real Estate”).

Then the couple had a second child. And the wife received maternity capital, which was spent on improving the house with a plot. Since the government payment went towards real estate, the cottage and land had to be re-registered for the whole family within six months. This is what the Law “On Additional Measures of State Support for Families with Children” dictates. But the woman did not do this.

And three years later, the couple divorced. And the ex-husband filed a lawsuit to divide the family property.

In the district court, the ex-husband asked to divide the property into four equal parts: a quarter share should go to him, his ex-wife and two children. The court agreed with him and granted the claim. The court also noted that the woman, by law, should have registered the house and land in the name of all family members, but did not do so.

The bank, which had a mortgage on the house and land, did not agree with this decision. A representative of the financial institution wrote a complaint to the Krasnodar Regional Court. In this complaint, the bank insisted that without its permission the collateral property cannot be disposed of, and it will be possible to register real estate for the whole family only after the loan is repaid and the collateral is removed.

The regional court agreed with the bank’s position and canceled the act of the first instance, refusing to divide the house and the plot. These conclusions were later supported by cassation. That’s when the ex-husband went to the Supreme Court of the Russian Federation.

There, the materials of the dispute ended up in the Judicial Collegium for Civil Cases, and the Supreme Court decided differently, disagreeing with its colleagues.

To allocate shares of family members, it is not necessary to obtain the consent of the bank, said the trio of judges of the Supreme Court. The division of the house and land itself does not terminate the mortgage obligations. This is stated in Article 353 of the Civil Code of the Russian Federation. In such a situation, the property becomes common, and all owners can be considered joint mortgagors. The division of property arranged at the expense of maternity capital cannot be refused just because it is collateral, the Supreme Court emphasized and referred to its review of the judicial practice of the Presidium of the Supreme Court (dated June 22, 2016).

The judges of the Supreme Court sent this dispute for a new consideration to the appellate instance — the Krasnodar Regional Court. There, the materials were studied in a new way, and this time the decision of the first instance remained in force — the house and plot were allowed to be divided equally between the former spouses and two children.

Experts carefully studied this decision of the Supreme Court and stated that in this case “there was a conflict in the requirements of civil legislation on collateral and the norm for distributing maternity capital funds.”

It follows from the provisions of the Civil Code that the pledgee, as a general rule, can make claims against each owner of the pledged property, even if they have changed.

And paragraph 15 of the Rules for allocating maternity capital funds establishes that the obligation to register housing as joint ownership arises after the mortgage registration record is cleared. The appeal and cassation gave priority to the rules, and the district court and the Supreme Court of the Russian Federation correctly considered that the rights of the mortgagee were not violated by the change of owners.

Ruling of the Supreme Court of the Russian Federation No. 18-KG22-144-K4

Text: Natalia Kozlova,

source: Special project “Square meter” — https://pravo.ru/story/246184/