Dividing the Shared Home and Mortgage During Divorce
Divorce in Estonia involves the division of marital property, which typically includes the family home. Under the Family Law Act (Perekonnaseadus) § 27, property acquired during the marriage is considered joint property unless a prenuptial agreement states otherwise.
Principles of Property Division
According to § 28 of the Family Law Act, joint property is divided into equal shares upon divorce. Even if the property is registered in only one spouse's name, it is legally considered joint property if it was acquired during the marriage using joint funds or efforts.
Mortgage Obligations
Mortgages are usually taken out jointly. Under the Law of Obligations Act (Võlaõigusseadus) § 65, divorce does not automatically terminate your liability toward the bank. Both spouses remain jointly and severally liable for the loan unless the bank agrees to release one party.
Common Solutions:
- Selling the Property: The home is sold, the mortgage is paid off, and the remaining equity is split equally.
- Buyout: One spouse retains ownership, assumes full responsibility for the mortgage, and compensates the other spouse for their share of the equity.
- Continued Co-ownership: This is rare and requires a formal notarized agreement, which can be complex to manage.
It is crucial to note that any change to the mortgage contract requires the bank's approval. The bank will assess the remaining spouse's creditworthiness before agreeing to remove the other party from the loan agreement. Without the bank's consent, both parties remain legally bound to the debt.
Are you facing uncertainty regarding your property division? Our expert legal team is here to provide clarity. Contact Legal Aid 24 today for a personalized analysis of your situation and ensure your rights are fully protected!