Registering rights derived from acts between spouses

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Would the Land Registry make changes in ownership’s entry (proprietorship) on the bases of acts performed between the spouses?

In Finland ownership´s entries in the Land Register can be changed on grounds of a transfer act between spouses or on grounds of a distribution of the matrimonial property of the spouses. The distribution of the matrimonial property can be based on a contract entered by the spouses or on a court decision.

If making an ordinary transfer act between spouses, it must always be made according to the Finnish law when the real property is situated in Finland. That means that the transfer document must be signed in the presence of both spouses and witnessed by a public purchase witness. When making this act in digital form in Property Transaction Service, the public purchase witness is not needed.

If making a distribution act and the applicable law is the Finnish Marriage Act (234/1929), both spouses must sign the document and there must also be signatures from two impartial witnesses. The Land Register Authority examines ex officio whether a foreign law must be applied to the distribution of matrimonial assets of the Spouses. When the applicable law concerning the distribution of the matrimonial assets is not the Finnish Marriage Act, spouses themselves must give reliable information about the contents of the applicable law and it’s demands in order to get the distribution registered. However, according to the Finnish Marriage Act, section 137, subsection 1, a distribution contract between the spouses which has been entered according to the form requirements in the Finnish Marriage Act is usually deemed valid notwithstanding the fact that a law of a foreign state is otherwise applicable to the property regimes of the spouses in question.

Civil status of parties is checked from Population Information System, when spouses are registered in Finland. When they aren’t registered in the Finnish system, parties should give the information about their civil status themselves, if it has effects to the disposition itself or to the registration.

If the spouses have entered a marriage settlement it is usually mentioned in the document because the settlement affects the conclusion made in the distribution.

When the acquisition of a piece of a real estate is based on a distribution of matrimonial assets of the spouses and the registering of that property is applied for on grounds of that distribution, the Register Authority always checks whether there has been a legal ground for the distribution (“ositusperuste” in Finnish). This is considered according to the law which is applicable to the matrimonial property regimes of the spouses. According to the Finnish Marriage Act the distribution of matrimonial property can be carried out if the marriage has been dissolved or if the proceedings concerning the dissolution of the marriage is at least pending in a court. If the applicable law is a foreign law there can be other legal grounds for distribution of matrimonial property, too.

According to some foreign marriage laws the fact that the spouses have been convicted to live separated from each other, although the marriage has not been dissolved nor there is a proceedings pending concerning it, can also be a legal ground for the distribution of matrimonial assets. Should there not be such grounds for distribution of matrimonial assets the transfer of real property between the spouses has to be carried out by following the ordinary requirements in form concerning the transfer of ownership of a real estate.

The document made between the spouses must be presented as original when the registration of acquisition based on it is being applied for in the Land Registry.

In Finland the requirements are the same with registered partners.

Practical case 1

Paul and Mary married and they both own jointly an immovable property registered as such in your land book. Following a divorced between them, the property will become of exclusive ownership of Mary;

 a) by means of the Court decision,
b) by an agreement between spouses in order the liquidation of their common assets.

In Finland, there are two types of carrying out the distribution of matrimonial assets. The first one is an agreement (contract) between the spouses. The second one is the distribution decision made by an estate distributor, who has been ordered by a court to distribute the assets of the spouses in question.

Mary is obliged to apply for registration of her acquisition of ownership in a time period of six (6) months in the land register. The fixed time of six months to apply for registration is running as from the day the distribution decision made by the estate distributor has become final or as from the day the agreement entered between the spouses has become final. This happens after six months has gone since the decision of the estate distributor has been made or since the signing of the distribution agreement has taken place. If the spouses have explicitly abstained from bringing an action in the court against the distributor´s decision or against the distribution agreement, that is, they have announced that they accept the decision or the agreement to be immediately final, the time period of six months to apply for registration of the acquisition starts running at once.

If Mary doesn’t apply for the registration in time, there might be consequences with the tax payments (higher tax). The registrar examines that the estate distributors decision or the distribution agreement has become final and that the registration has been applied for in the right time. If needed, the applicant has to show the certificate given by a court that an action against the distributor´s decision or the distribution agreement has not been brought. If the applicable law is Finnish Marriage Act the distribution agreement must be signed by both Paul and Mary and there must be two impartial witnesses, too.

If the registrar discovers that the application has become pending late, i.e. after the time period of six months has expired, and if the acquisition is subject to the transfer tax, the registrar exhorts the applicant to submit an account for that the tax increase has been paid.

The above mentioned applies as such to the situations when it is question of registered partnership.

When the applicable law is a foreign law, Mary should give to the registrar the information about the contents of the foreign law and it’s demands.

 Practical case 2

Paul is the registered owner of an immovable property acquired by succession. Sometime after his registration, Paul marries Mary and decides that the property will be in the common ownership of both spouses, so they perform the transmission act by a matrimonial property agreement according to the applicable law.

In Finland Paul and Mary should make a normal transfer from Paul to Mary in order to register Mary’s ownership. It means that the transaction must be made in the presence of both spouses and a public purchase witness or in digital form in Property Transaction Service. The public purchase witness must send the deed of transfer to registrar and information about this transaction will be shown in register and will be public information. This is not yet the actual registration of Mary’s ownership. After transaction Mary is obliged to send an application to register her ownership in certain time (6 months after transaction). When the transfer is made in digital form in Property Transaction Service, registrar sees the deed in digital form and the application comes pending directly from that service.

The answer wouldn’t be different if dealing with registered partnership.