Not everything built during marriage is divided in half: The Supreme Court considered a case about a gas station and land after divorce

After the marriage was dissolved, the husband went to court. He stated that during the marriage the wife privatized the land plot free of charge, and on this land they jointly built a gas station with shared funds.

In his opinion, since the construction was financed by both, the gas station and the land plot should be joint property.

The Supreme Court, however, noted that the land plot, privatized free of charge by one of the spouses, is his or her personal private property. If during the marriage a structure that is joint marital property was built on this land, termination of ownership rights to the land plot or its share is possible only if the owner is simultaneously awarded monetary compensation. At the same time, the claim to recognize the property as joint marital property is not a proper way of protection, since an effective way is to recognize the right to a share in the property or its division.

Case details

The plaintiff filed a lawsuit to recognize the land plot and the gas station built on it as joint marital property and to divide them. The claim was based on the fact that during the marriage the defendant obtained the land plot through privatization, on which the gas station was built and put into operation with joint efforts and funds. The plaintiff argued that the value of the object significantly increased (from UAH 94,000 to UAH 718,000), which is grounds for recognizing all the property as joint property under Article 62 of the Family Code of Ukraine.

Positions of the court of first instance and appellate court

The court of first instance, whose conclusions were agreed upon by the appellate court, partially satisfied the claim, recognizing the gas station as joint property since it was built during the marriage, and determined the spouses’ shares as 1/2 each in ownership rights both to the gas station and the land plot, motivating its decision by Articles 120 of the Land Code of Ukraine and 377 of the Civil Code of Ukraine, stating that the right to the land plot follows the right to the building or structure.

Supreme Court decision

The Supreme Court disagreed with the conclusions of the lower courts regarding the satisfied claims to recognize the gas station as joint property and to divide the joint property, overturned the decision in this part, and issued a new decision denying these claims for the following reasons.

The claim to recognize property as joint property does not provide effective protection but only grounds for resolving a dispute about property division or recognition of the right to a share. The determination of the scope of jointly acquired property should be made in the reasoning part, not in the operative part of the decision.

The land plot acquired during the marriage by privatization is the personal property of one of the spouses. Civil law does not contain provisions for uncompensated termination of ownership rights to such land.

If a joint real estate object is built on the personal land plot of one spouse, the other spouse has the right to demand monetary compensation for their construction expenses or to have this amount considered when dividing other joint property.

Division of the building in kind, which entails the transfer of the right to a share of the land plot from the owner to another person, is possible only if the plaintiff first deposits monetary compensation for the value of such a land share into the court’s escrow account (by analogy with part 5 of Article 71 of the Family Code of Ukraine).

Since the plaintiff did not indicate readiness to pay compensation for the land share, and the lower courts did not address this issue, there are no grounds to satisfy the claim in this part. The plaintiff is not deprived of the right to demand compensation for their expenses on property improvements within another dispute.

Supreme Court ruling in case No. 369/3056/21 (proceeding No. 61-8040sv23).

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