Division of an apartment under a military mortgage in the event of a divorce

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Military mortgage during divorce
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Unfortunately, divorces of married couples are not uncommon in our country. This unpleasant process is accompanied by the division of property. But how to divide an apartment between former spouses if it was taken out with a mortgage? A difficult question to which there is no clear answer. Let's try to figure out how to divide an apartment in a mortgage during a divorce, consider different situations, and find the right solution for each case.

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What is a military mortgage

Military mortgage refers to a special program implemented by the state, through which housing issues of certain categories of military personnel are resolved. Assistance to military personnel in purchasing apartments is provided with funds allocated from the federal budget.

The basic rules of this program and methods of its implementation are regulated by Law No. 117-FZ of August 20, 2004 and a number of government regulations. It can only be used by military personnel who meet the following requirements:

Long-term service officers and warrant officers who began service no later than 2005.
Warrant officers and midshipmen on a primary contract, the duration of which is at least three years.
Graduates of military universities who signed a contract in 2005 and subsequent years.
Soldiers, foremen, sergeants and sailors serving on re-contract since 2005.

To figure out whether it is possible to divide a military mortgage, you need to understand the principles of its operation.

How does the military mortgage system work?

Citizens in military service are issued a targeted loan, with which they can:

buy a house or apartment (in a new building or on the secondary market), a room in a communal apartment, a cottage;
make a down payment on a mortgage taken out to purchase a home;
conclude an agreement on participation in shared construction.

Terms of issue:

The loan amount in 2021 is 3 million rubles.
The annual amount of savings is 260 thousand 141 rubles. It is expected to increase in 2021 to 268 thousand 456.6 rubles.
The down payment is at least 10% of the cost of the residential premises.
The mortgage must be repaid before the borrower reaches age 45.
The minimum loan term is three years, the maximum is 25 years.
The purchased square meters are allowed to be used both for living and renting.

Such real estate can only be sold upon full payment of its cost.

During the period of service, the loan is repaid by the Ministry of Defense. Upon completion of years of service, it is fully repaid. If dismissal occurs ahead of schedule, the loan must be repaid to the military personnel, and interest is also paid.

The loan is recorded in a special savings account registered to a specific participant in the system. It follows from this that the receipt of targeted money does not depend on whether he has a family or what its composition is.

This is the first argument in favor of the fact that an apartment purchased with a military mortgage cannot be divided during a divorce, since it is not community property.

How and when to inform the bank and Rosvoenipoteka

If you decide to dissolve your family union or have already carried out this procedure, you need to notify the credit institution and other mortgage holders about this. This rule especially applies when the loan is repaid from common money. In such a situation, there is a risk that one of the spouses will not pay the debt. Then the bank has the right to demand payment of the balance of funds before the end of the contract.

A military divorce lawyer with a military mortgage will help resolve this situation quickly. He will tell you when to inform the bank and Rosvoenipoteka, and will also draw up an appeal in accordance with the law. The document must indicate the date of divorce, information about the spouses and income. You can send such a letter before the divorce or after it ends.

Is a military mortgage divided in a divorce?

In Art. 256 of the Civil Code of the Russian Federation and Art. 34 of the RF IC it is noted that everything acquired by a husband and wife during the period of officially registered family relations belongs to both of them. This rule does not apply if there are other agreements between them, formalized accordingly. In particular, spouses can sign a marriage contract and divide property by mutual consent as they please.

The following legislation sheds light on whether housing acquired through a military mortgage is considered common property:

In Art. 34. The RF IC specifies exceptions from common property that are not subject to division. These, in particular, are payments that have a special purpose.
In Art. 14 of Law 117-FZ On the Savings Mortgage System, a loan is called a targeted loan and is considered as a targeted payment exclusively to a military personnel who is a participant in the system.
The purchase of an apartment within the framework of the NIS is intended to provide for military personnel (who are such according to the Law on the Status of Military Personnel No. 76-FZ of May 27, 1998), and not their family members. This is confirmed by the fact that the amount of funds allocated does not depend on the presence of a family and the number of its members.
Another evidence is the absence in Government Decree No. 370 of May 15, 2008, regulating the procedure for lending on military mortgages, of any mention of the need to provide information about family composition.

Conclusion: from the analysis of the legislation it follows that only the serviceman himself has the right to housing acquired under a military mortgage, and only he becomes its sole owner after full payment. This right does not apply to his spouse either during marriage or during divorce.

Collateral after division of living space

In this case, the legal relationship does not end. The corresponding norm is enshrined in Art. 38 Federal Law “On Mortgage”, as well as in Art. 352 of the Civil Code of the Russian Federation. In other words, when the premises have several owners, they act as joint mortgagors.

According to the law, spouses are not required to ask permission to divide property from mortgagees, even when there are several of them. At the same time, he has no right to sell, donate or otherwise alienate his part, without obtaining approval. Otherwise, the bank will put forward a demand for early repayment of the remaining debt. This is stated in paragraph 1 of Art. 351 Civil Code of the Russian Federation.

As for an example of judicial practice, it is appropriate to cite the decision of the Svetlogorsk District Court of the Kaliningrad Region dated July 2, 2019 in case No. 2-396/19. It states that declaring the subject of pledge as common property does not infringe on the rights of the pledge holders. Moreover, they were aware of the marital status of the mortgagor.

When can a spouse claim property?

There are situations when the law does not give a clearly negative answer. In such cases, it is possible to go to court and receive, if not half, then a certain share of the apartment or monetary compensation. Such situations include the following:

If the cost of housing purchased with a military mortgage is greater than the loan amount, then the difference required for the purchase is repaid from the common budget of the husband and wife. It is this difference that can be considered the subject of dispute in court.
To pay off the debt on a military mortgage, the spouse’s funds that belong only to her (for example, received as an inheritance or received as a gift) can also be used. Then, upon divorce, the wife will receive a share proportional to the investment or compensation.
The apartment may undergo expensive repairs and redevelopment. If two people participated in their financing, then upon presentation of the relevant documents evidencing payment, you can challenge the share in the apartment.
If a serviceman leaves the service before the deadline, he must repay the loan and interest on it himself. If his wife helps him, she can count on compensation.
The property is for sale. It comes out of collateral and the NIS participant becomes the owner. The amount received after the sale of the apartment can be considered as jointly acquired property.
A marriage contract has been signed – it doesn’t matter before or during the marriage, the main thing is to have it certified by a notary. It may stipulate the division of property acquired under a military mortgage or the receipt of compensation in the event of a divorce.
Both husband and wife are military personnel, and both received a targeted military mortgage loan to purchase an apartment. Then each of them will receive their share.
A military mortgage can be paid using maternity capital. In this situation, both the other spouse and children can claim shares in it. In other cases, children can apply for housing purchased under the NIS program only in the event of the death of the parent who received it.

Dispute resolution methods

A decision on the division of housing purchased under the NIS program can be made only in the case of the financial participation of the military spouse. In this case, the former spouses can enter into a settlement agreement on a method of compensation for the funds invested in the apartment from the family budget.

If it was not possible to reach an agreement peacefully, then the ex-wife/husband has the right to defend his interests in court. If the amount of the claim does not exceed 50,000 rubles, then the case will be heard in the magistrate's court. If the amount of claims exceeds the specified amount, then the conflict will be resolved by the city court at the place of residence.

Arbitrage practice

As for judicial practice on military mortgages, it is contradictory. Many cases considered up to 2021 inclusive were decided not in favor of wives and husbands who tried to divide housing taken with the help of NIS. However, in 2021, decisions increasingly began to be made in favor of spouses claiming “military” square meters.

Indicative in this regard is the dispute between the spouses, which was considered in different instances. According to it, there is a ruling of the Supreme Court No. 58-KG16-25 dated January 24, 2017, which states that if housing under a military mortgage was acquired during marriage, then it is common joint property. It will be appropriate to consider this dispute in detail.

Claims of spouses against each other

Spouses Evgeniy and Irina K. (names have been changed) entered into a registered marriage in 2007. In 2010, Evgeniy, being a contract soldier, received a targeted loan from the Ministry of Defense of about 540 thousand rubles, and took out an amount of about 2 million from Primsotsbank for 14.5 years with an interest rate of about 10% per year. In the same year, an apartment worth approximately 2 million 600 thousand rubles was purchased.

In addition to the indicated apartment, the family had two cars, and loans were taken out from the bank in Irina’s name. Evgeniy also rented out an apartment purchased with a military mortgage under a rental agreement. In 2013, the couple filed for divorce and began dividing their acquired property. The ex-wife filed the lawsuit.

She made the following demands:

Getting half of the apartment.
Half the amount from renting out housing.
Leave one car to your ex-husband, and receive compensation for the second one equal to ½ of its value.
Divide the loan amount by two.

The ex-husband filed a counterclaim, asking:

Give Irina the second car, collecting half of its value in his favor.
Collect half of the amount from her to pay off the remaining loans.

Decisions of the first and second instances

The Khabarovsk Central Court, by decision in case No. 2-2163/2014 dated September 30, 2014, determined that each person retains a car, loan obligations are also divided equally, and the apartment goes to Evgeniy. Later, this decision, appealed by Irina, was confirmed in the regional court.

Both courts were guided by the fact that housing was acquired not through general investments, but through payments representing “special assignments”, which are issued regardless of the presence of family ties.

The same reason prevented Irina from receiving a share of the rent. But she did not stop there and appealed to the Supreme Court.

Supreme Court Determination

According to the opinion of the judges of the Supreme Court, expressed in the already mentioned definition, in such cases one must be guided by the fact that property acquired during the period of legalized marriage relations is considered as common, with some exceptions. Such exceptions include:

acceptance of property as a gift;
receiving an inheritance;
acquisition under other transactions of a gratuitous nature;
possession as an individual thing.

An apartment purchased under a military mortgage cannot be included in any of these exceptions. The law does not provide for any restrictions on the use of housing purchased under the NIS for military family members.

Consequently, Evgeniy K.’s participation in this system is not a basis for considering the apartment his personal property. And Irina has the right to half of the apartment and half of the funds received from renting it out.

Thus, the issue of dividing an apartment under a military mortgage has not yet been finally resolved. However, trends indicate that, although it is difficult for ex-spouses to win in court, it is possible.

Loan Features

The peculiarity of the mortgage is that the debt is repaid not by a citizen of the Russian Federation, but by the Ministry of Defense.

This is an opportunity for an officer to buy an apartment on preferential terms.

The main features of this loan:

To receive such a loan you must be a military member. The rest of the family does not participate in this program, therefore they are not responsible if the terms of the contract are violated.
Housing purchased under the state program is pledged by the Ministry of Defense. The pledge is valid until the debt is paid. A service member cannot sell the apartment or part of it until the loan is repaid.
It is impossible to renew the loan agreement. The only owner of the living space is the one in whose name the apartment is registered. He alone is responsible for the terms of the contract, whether he is married or not.
When a serviceman retires, he himself pays off the remaining amount under the contract.
If the apartments were purchased only through the state program, then the military man’s apartment will not be divided in half in the event of a divorce from his wife.
The available loan amount is 2.4 million rubles, no more. The borrower or his family members can contribute additional personal funds to purchase a home with a higher value.