Property relations

Because of the growing number of international marriages in European Union, the EU Council adopted on 24 June 2016 Council Regulation (EU) No 2016/1103 implementing enhanced cooperation in the areas of jurisdiction, governing law and recognition and enforcement of judgments in Matrimonial Property Matters (hereinafter referred to as the “MPM Regulation”).

This regulation addresses both jurisdiction and governing law for matrimonial property matters but regarding the determination of the governing law should be applied only for marriages concluded after 29th January 2019 (in other cases the governing law for the property relations is set forth by the national law, namely by the No 91/2012 Coll., Act on International Private Law (hereinafter “AIPL”).).

Jurisdiction of the Czech courts

In divorce matters

If the international divorce influences the property rights of the spouses, the Czech courts have jurisdiction when the divorce proceeding was also conducted at Czech court.

For this kind of assessment of jurisdiction is also obligatory an agreement of the spouses if the jurisdiction was assessed based on the following:

• the applying spouse had it habitual residence on the territory of the Czech Republic at least one year before filling the divorce motion, or
• the filling spouse had its habitual residence at the territory of the Czech Republic at least six months before filling the motion and at the same time is a citizen of the Czech Republic.

In other cases

To the other cases of property relations in marriage can be included:

• the prenuptial agreements and
• the agreements adjusting the joint property of the spouses.

In this matters the jurisdiction of the Czech courts is given if:

• at the moment of commencement of the proceeding both spouses have their habitual residence in the Czech Republic, or
• the spouses had their last joint habitual residence in the Czech Republic and at the moment of the commencement of the proceeding one of them still lives in the Czech Republic, or
• at the moment of the commencement of the proceeding the defendant has his or her habitual residence in the Czech Republic, or
• at the moment of the commencement of the proceeding both spouses are citizens of the Czech Republic

The MPM regulation also states that the Czech court can obtain the jurisdiction in the property dispute on the basis of agreement between parts of the dispute.

The governing law

The new principle brought by MPM regulation is the “unity of the governing law” according to which the property relations in marriage, or for the adjustment of the property relations after the divorce, the governing law shall be the governing law of all the property which forms part of these property relations and the factual placement of the property is not important.

The first possibility to determine the governing law for the property relations in marriage is the choice of the governing law. The spouses can agree on the governing law for the future, which will be applied on their property relations. They can choose from the following:

• the law of the state in which at least one of the participants of the agreement has had his or her habitual residence at the time of the conclusion of the agreement.
• the law of the state of citizenship of one of the parties.

The agreement on the governing law for the property relations in marriage must be in a written form and contain date and signature of both parties.

If the agreement on the choice of the governing law for the property relations in marriage is not concluded the governing law shall be determined as law of the state:

• of habitual residence of the spouses during marriage, or
• of citizenship of both spouses at the moment of celebration of the marriage, or
• of the closest relation of the spouses at the moment of celebration of the marriage.

When the spouses are not citizens of the member states and at the same time does not have their habitual residence in the same state and are citizens of different states, if the Czech court decides, then the property relations follow the Czech law. Property relations in marriage can be ruled by the law of the state of the last joint habitual residence of the spouses. The same applies when there is a valid bilateral international agreement between the Czech Republic and third state and one of the spouses is citizen of that third state.

Property relations according to the Czech law

Property relations during marriage

In the Czech law apply provisions of the Act No. 89/2012 Coll., Civil Code, to the property relations, namely a special institute called "joint property of spouses". Joint property of spouses is a specific form of co-ownership that can only arise between spouses (and which generally arise at the time of marriage) and is subject to legislation other than co-ownership.

All the property that one or both spouses gained throughout the marriage is included into the join property. The debts attained during the marriage are also included if:

• they are not related to the property that is in exclusive ownership of only one of the spouses and the debts do not exceed the gains from this property, or
• one of the spouses attained these debts without consent of the other spouse and they cannot be considered as satisfaction of regular needs of the family.

On the other hand, the following are not a part of the joint property:

• personal belongings of the spouse,
• property attained by only one of the spouses as a donation, heritage, or legacy, if the donator or testator did not state otherwise,
• the property attained by one of the spouses as compensation for non-material damage to its natural rights,
• the property which was attained by one of the spouses from acts related solely to its exclusive property and
• the property attained by one of the spouses as compensation for damage or destruction of his or her exclusive property.

The property relations can be instead of legal provisions be regulated by an agreement (contractual regime) or by judicial decision.

Any provision related to the property in joint property of spouses must have form of public writing. The retroactive provisions do not have effect.

The engaged couple and the spouses can agree on:

• the secularization of the property (i.e. the property attained by each spouse during the marriage, remains their exclusive property).
• the joint property will begin at the date of the termination of the marriage (i.e. that only the property attained during the marriage by each spouse that was part of it at the day of the termination of the marriage, belongs to the joint property of spouses),
• the extension or restriction of the joint property (in case of the extension can be included even the property that is normally excluded by law, for example personal belongings of the spouses).

Settlement of the property relations after the termination of the marriage

The termination of the marriage represents the termination of the joint property of spouses. The rights of property and obligations related to the end of marriage are covered briefly in the Czech law. The Civil Code determines that the property in joint property of spouses should be primarily settled by an agreement. If this is not possible than the court shall settle the property rights and obligations if any of the spouses applies for the settlement.

The court settles the joint property in following manner:

• both spouses obtain the same part of the settled property.
• each spouse replaces the property it took from the joint property and used for his exclusive property,
• each spouse has shall receive compensation for his exclusive property which was spent on the joint property.

The court shall consider the following:

• needs of the dependent children
• the care of each spouse for the family especially for children and the household,
• The share of each spouse by which he or she contributed to attain and keep the value of the property belonging to the joint property.

If reaching the agreement on the settlement of the joint property of the ex-spouses is impossible in period of three years since the end of the joint property of spouses (the divorce) and neither spouse applied for the settlement of the joint property, then applies an irrebuttable legal presumption that:

• material movable property belongs to the spouse that uses it as exclusive owner to satisfy his or her personal needs, needs of his or her family or need of the household,
• the rest of the movable and immovables belongs to co-ownership of ideal share of both spouses where both shares are equal and
• the rest of the property rights, claims and debts belongs to both spouses jointly, where their shares are equal.