Spouse Consent to Apartment Sale — Complete Legal Guide

Understanding Rights in Jointly-Owned Property — Legal Fundamentals

When a couple purchases a jointly-owned apartment, both spouses have equal rights in the property, even if only one of them is registered in the land registry (Tabo). This situation creates a complex legal status: each spouse has the right to sell their share, but Israeli family law provides legal protections for both parties. If you wish to sell the apartment but your spouse refuses, or vice versa, it is important to understand the rights and obligations of each party.

In principle, spouses are partners in jointly-owned property during marriage or during the marriage period (depending on the legal definition of "jointly-owned property" according to the Joint Property Rights Law, 1973). The right to sell is not automatically limited, but the law provides certain legal tools to protect the interests of the party who does not wish to sell.

What is "Jointly-Owned Property" under the law?

Jointly-owned property is property acquired during marriage or contributed for the purposes of marriage, without distinction as to who actually purchased it. A jointly-owned residential apartment is generally considered jointly-owned property, unless it can be proven that its purchase was made from funds that were in the personal ownership of one spouse prior to the marriage (such as an inheritance or a gift received before marriage). The Joint Property Rights Law stipulates that each spouse is entitled to half the value of the jointly-owned property, regardless of who contributed more funds or who is registered in the land registry.

Why is Spouse Consent to Sale Important?

If only one spouse is registered in the land registry, they may think they have full authority to sell. However, this is a serious legal mistake. The other spouse can file a lawsuit with the court and demand:

• Cancellation of the transaction — If the sale was executed without their consent, the other spouse may sue for cancellation of the sale contract or registration of new rights in the land registry;
• Monetary compensation — If cancellation is not possible (for example, if the buyer has already taken possession of the apartment), the spouse can claim compensation equal to the value of half the apartment;
• Attachment of the property — Prior to sale, a spouse can file a request to attach the property, which will prevent any transaction until the lawsuit is resolved.

For this reason, Mandelbaum, Gor, Witzman-Gor and Co. attorneys always check with apartment buyers whether there is a spouse, and recommend obtaining written consent before signing the sale contract. This protects the buyer, seller, and spouse alike.

Spouse Refusal to Sell Jointly-Owned Apartment — What Are Your Options?

If your spouse refuses to sell the jointly-owned apartment, you face a complex situation that requires legal support. There are several ways to deal with this refusal, depending on the circumstances of the case and the stage of marriage or divorce.

First Option: Direct Negotiation and Legal Consultation

Before any legal action, it is advisable to attempt direct negotiation with your spouse. Often, refusal to sell stems from a lack of understanding of legal rights or fear of financial loss. An attorney from Mandelbaum, Gor, Witzman-Gor and Co. can assist in mediation or explain the rights to both parties, which often resolves the dispute without the need for an expensive legal proceeding.

Second Option: Written Agreement on Sale

If the spouse agrees in principle to sell but there are disagreements over the terms (for example, the sale price, distribution of proceeds, or date of sale), a written agreement can be signed that defines all terms. Such an agreement is legally binding and prevents future disputes.

Third Option: Legal Proceeding in Court

If negotiation fails, a lawsuit can be filed with the court requesting forced sale of the property. In this proceeding, the spouse opposing the sale will be required to prove a legal reason why the sale should not be permitted. Generally, the court will allow the sale unless it can be proven that it will substantially harm the objecting spouse (for example, if the spouse is a minor and the apartment is a shared family home).

Fourth Option: Divorce Proceeding

If the marriage is heading toward dissolution, the sale of the apartment may be part of the property division process in divorce proceedings. In the family court, the court can order the sale of the property as part of the divorce settlement, even if one spouse objects. Typically, the court will divide the sale proceeds according to each party's rights in the jointly-owned property.

It is important to note that in a divorce proceeding, the objecting spouse may be required to pay part of the mortgage, appreciation tax, historical purchase tax, or other legal expenses, even if they did not consent to the sale. This depends on the court's ruling and the circumstances of the case.

Legal Protection for the Spouse Opposing the Sale

A spouse who opposes the sale is not without legal rights. In principle, the law allows him or her to protect his or her interest in the shared property in several ways:

Right to Attach the Property

If a spouse fears that his or her spouse is about to sell the apartment without consent, he or she can file a request to attach the property at the land registry. This attachment will block any transaction until the lawsuit is heard in court. This is a powerful legal tool protecting the spouse from unlawful sale.

Right to Sue for Cancellation of the Transaction

If a spouse finds that an apartment was sold without his or her consent, he or she can file a lawsuit to cancel the transaction. The court will examine the case and may order cancellation of the registry entry and restoration of the property to his or her original name.

Right to Financial Compensation

If cancellation of the transaction is not possible (for example, if the buyer has already taken possession of the apartment), the spouse can sue for compensation in the amount of his or her share in the property (typically, half of the property's value).

Right to Participate in Decisions Regarding the Property

A spouse who is not registered at the land registry still has the right to participate in decisions regarding the sale, rental, or any significant change to the property. This stems from the law of shared property rights, which grants both spouses equal rights in the shared property.

An attorney in Petah Tikva can help the spouse protect his or her rights and ensure that any transaction or decision regarding the property is made with the legal consent of both parties.

Legal Costs and Their Allocation

When a spouse opposes the sale and legal proceedings begin, an important question is who will pay the costs of the proceedings. Generally, the court will order the allocation of costs based on the outcome of the proceedings and the circumstances of the case. If the spouse who opposed the sale loses the lawsuit, he or she may be required to pay part of the legal costs of the other spouse. Conversely, if the spouse who opposed the sale prevails, the spouse who initiated the lawsuit may be required to pay the costs of the proceedings.

Taxes and Payments When Selling a Shared Apartment

When a couple sells a shared apartment, there are several taxes and payments that are important to understand:

Capital Gains Tax

Capital gains tax is a tax imposed on the profit from the sale of a property. The profit is calculated as the difference between the sale price and the "base price" (usually, the original purchase price, adjusted according to the price index). When selling a shared apartment, capital gains tax is calculated for each spouse separately, according to his or her share in the property. If the apartment is sold at a loss (the sale price is lower than the purchase price), there is no obligation to pay capital gains tax.

Historic Purchase Tax

If the apartment was purchased during a period when a purchase tax law was in effect (which was reinstated in certain periods), there may be an obligation to pay historic purchase tax at the time of sale. This depends on the date of purchase and the circumstances of the case.

Betterment Levy

The betterment levy is a payment imposed on property owners when the property receives "betterment" from public works (such as construction of a road or public infrastructure). At the time of sale, it must be checked whether there is an obligation to pay betterment levy and transfer it to the buyer.

Attorney Fees

Attorney fees for real estate transactions at the time of sale depend on the agreement between the parties. Generally, the seller pays his or her attorney and a percentage of the total costs of the transaction (such as verification of rights, preparation of the deed of sale, and registration at the land registry). An attorney in Petah Tikva will explain his or her rates at the first consultation meeting.

Additional Expenses

When selling an apartment, there may be additional expenses such as:

• Land registry registration fees;
• Fees for checking caution entries at the land registry;
• Fees for removal of mortgage (if the apartment is mortgaged to a bank);
• Property insurance fees (if required);
• Fees for a site visit by a surveyor or engineer (if required to verify the apartment's size).

All of these expenses should be planned in advance so there are no surprises when closing the transaction.

Legal Situation — Common Disagreements Between Spouses

In Israeli legal publications, stories frequently appear about spouses who have become entangled in disputes regarding the sale of a shared apartment. Below are some of the common disagreements:

"I am registered in the land registry, so I can sell without consent"

This is a common legal misconception. Registration in the land registry does not give you full authority to sell without your spouse's consent. Your spouse is entitled to half of the value of the shared property, regardless of who is registered in the land registry. If you attempt to sell without their consent, they can file a claim for rescission of the transaction or demand financial compensation.

"My spouse refuses to sell, so I am stuck"

This is not true. Even if your spouse refuses to sell, you have legal options. You can file a lawsuit in court requesting a forced sale, or conduct negotiations with the assistance of an attorney. In divorce proceedings, the court can order a sale as part of the asset division arrangement.

"If we sell, my spouse will receive half the proceeds, but they contributed nothing"

Under Israeli family law, rights in shared property are not dependent on financial contribution. Each spouse is entitled to half the value of the shared property, regardless of who contributed more funds toward the purchase or maintenance. This is a law designed to protect both spouses.

"My spouse placed a lien on the property, so I cannot sell"

If your spouse placed a lien on the property, this does not mean you cannot sell. A lien prevents the registration of a transaction in the land registry, but you can still file a lawsuit in court to vacate the lien or obtain consent for the sale. An attorney in Petach Tikva can assist in filing a request to vacate the lien.