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If full ownership was vested before the marriage, the property shall belong to the buyer spouse.
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If full ownership was vested during the marriage, the property shall belong to the conjugal partnership.
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In either case, any amount advanced by the partnership or by either or both spouses shall be reimbursed by the owner/s upon liquidation of the partnership.
In a conjugal partnership of gains, the spouses place in a common fund the proceeds, products, and fruits and income of their separate properties and those acquired thereafter through their efforts or by chance.
Special rule however applies for properties bought on installment before the marriage and was later on paid in full through the conjugal partnership funds.
For example, previous to his marriage, Mr. X bought a house and lot on installment basis in the amount of P250,000.00. He paid P220,000 but there is a stipulation that upon the execution of the contract, ownership shall be vested upon him. A few months later, he married his longtime girlfriend. And during the marriage, the amount of P30,000.00 was paid out of conjugal funds. Who then owns the house and lot?
Under the Family Code:
“Art. 118. Property bought on installments paid partly from exclusive funds of either or both spouses and partly from conjugal funds belongs to the buyer or buyers if full ownership was vested before the marriage and to the conjugal partnership if such ownership was vested during the marriage. In either case, any amount advanced by the partnership or by either or both spouses shall be reimbursed by the owner or owners upon liquidation of the partnership.”
Accordingly, if full ownership was vested before the marriage, the property shall belong to the buyer spouse.
However, if full ownership was vested during the marriage, the property shall belong to the conjugal partnership.
Please note however that in either case, any amount advanced by the partnership or by either or both spouses shall be reimbursed by the owner/s upon liquidation of the partnership.
In the above example, X is the owner, because ownership was vested in him before the marriage. The fact that the amount was paid on installment basis does not matter. What matters is the stipulation that the ownership shall be vested before the marriage.
However, if the execution of the contract of sale was done after marriage, the ownership in the case above-cited is vested during the marriage; the house and lot are owned by the conjugal partnership.
The law, however, requires that in either case, X must reimburse the conjugal partnership for whatever he advanced or paid. In the same vein, in the second case, the conjugal partnership shall reimburse X the amount of P220,000.00 he paid to the seller.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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