In brief
For a couple who married in Israel and live there, the division of a property in Romania on divorce is usually determined under Israeli law, because that is the law to which the Romanian Civil Code refers. Registration, sale and the mortgage, by contrast, are handled in Romania and under its rules: a partition agreement before a Romanian notary, or an Israeli judgment that has gone through recognition proceedings before a Romanian court.
Key takeaways
- 1Romania does not apply EU Regulation 2016/1103; the Romanian Civil Code refers to the law chosen by the spouses and, absent a choice, to the law of their common habitual residence.
- 2Under the Israeli Spouses (Property Relations) Law, each spouse is as a rule entitled to half the value of the assets, excluding assets held before the marriage, inheritances and gifts.
- 3An Israeli judgment on the division of property is not registered in Romania automatically; recognition proceedings before a Romanian court are required.
- 4Selling the property requires the signature of all registered owners, and a divorce does not change the loan agreement with the bank.
- 5The cheapest way to deal with the question is to plan for it on the day of purchase: a prenuptial agreement, a choice of law and a registration that reflects the money.
When you buy a home with a spouse or partner, nobody wants to think about separation. But a property abroad adds to this question a layer of two legal systems, two possible courts and a land register kept in another language. This guide explains what happens to a property in Romania when an Israeli couple separates, and what can be arranged in advance so that the separation, if it comes, does not turn into legal proceedings in two countries.
What legal questions arise when there is a property in Romania in a divorce?
It is worth breaking the subject down into three questions, each with its own answer:
- The law: under which system is it determined what belongs to whom, the Israeli or the Romanian?
- The decision-maker: an Israeli forum (a family court or a religious court), a Romanian forum, or agreement between the spouses themselves.
- The registration: how the decision becomes a change in the land register (Cartea Funciară) kept by ANCPI, the Romanian National Agency for Cadastre and Land Registration. It is the registration that makes the right effective against any third party.
Under the Israeli Spouses (Property Relations) Law, each spouse is as a rule entitled to half the value of the assets, excluding assets held before the marriage, inheritances and gifts.
Which law applies to the division: Israeli or Romanian?
In most cases involving Israeli couples, the answer is Israeli law, even though the property itself is in Bucharest. And what leads there is, in fact, the Romanian conflict of laws rules.
EU Regulation 2016/1103, which governs matrimonial property regimes, applies only in the states that have joined the enhanced cooperation. Under Council Decision 2016/954 these are 18 states, and Romania is not among them. A notary or a judge in Romania therefore turns to the conflict of laws rules in the Romanian Civil Code:
| Situation | Which law applies | Article of the Romanian Civil Code |
|---|---|---|
| The spouses chose a law | The chosen law | 2590 |
| No choice | The law governing the effects of the marriage | 2592 |
| Determining the law governing the effects of the marriage | In order: the common habitual residence, the common citizenship, the place where the marriage was celebrated | 2589 |
| Joint move to another country | The law of the new residence, only from then on | 2596 |
The application of the law is not limited to EU member states, so Israeli law can also be the applicable law. On the Israeli side, Section 15 of the Spouses (Property Relations) Law provides that property relations are governed by the law of the spouses' domicile at the time of the marriage, unless they agreed otherwise. Both systems therefore point to Israel. Anyone who has moved to live in Romania, or where one of the spouses holds Romanian citizenship, needs a separate analysis.
How does division under Israeli law differ from division under Romanian law?
| Issue | Israel: Spouses (Property Relations) Law | Romania: community of property |
|---|---|---|
| During the marriage | Each spouse holds his or her own property | A property acquired during the marriage is as a rule joint |
| When the marriage ends | Balancing of resources: half the value of the assets | Division according to each spouse's contribution to the acquisition and to the debts |
| The default | Half to each | A presumption of equal contribution, until proven otherwise |
| What is excluded | Assets held before the marriage, inheritances and gifts | Separate assets, as a rule including inheritances and gifts |
| Sale during the marriage | The registered owner signs; the spouse's rights are examined in the balancing | A joint asset may be sold or encumbered only with the consent of both |
In Israel the main rule is the balancing of resources. The Spouses (Property Relations) Law applies to couples who married on or after 1.1.1974, and its Section 5 gives each spouse, when the marriage ends, half the value of the assets of both. What remains outside the calculation: what each spouse owned on the eve of the marriage, as well as inheritances and gifts. The practical result is that even when the villa is registered in the name of only one of you, it may enter the balancing if it was financed from joint funds.
In Romania the principle is community of property, and the division is made in two stages under Article 357 of the Civil Code: first the separate assets of each party are set aside, and then the joint assets are divided according to the extent of each spouse's contribution to the acquisition and to the repayment of the joint debts. Until proven otherwise, it is presumed that both spouses contributed equally. In addition, Article 346 makes the sale or encumbrance of a joint asset conditional on the consent of both.
Is an Israeli judgment enough to change the registration in Romania?
No. Romania does not automatically recognise judgments of states outside the EU, and Israel is one of them. The Romanian Code of Civil Procedure distinguishes between types of decisions:
| Type of decision | What is required in Romania | Article |
|---|---|---|
| Personal status of nationals of the state that issued it, for example the divorce itself | As a rule recognised by operation of law | 1094 |
| Other decisions, including the division of property | Recognition proceedings before a Romanian court: a final judgment, a competent court and reciprocity between the states. For actual enforcement, enforcement proceedings as well | 1095 et seq. |
In other words, the conclusion of the proceedings in Israel is not the end of the road. You should expect an additional stage before a court in Romania, which includes certified translations, apostilles and local representation, and which takes time and money.
What ways are there to end the joint ownership?
| The route | When it is suitable | What is important to know |
|---|---|---|
| Partition agreement before a Romanian notary | Both parties agree | The fastest: one receives the property, the other receives consideration, and the notary updates the registration. A party who cannot attend gives a power of attorney |
| Sale to a third party and division of the proceeds | Neither wants to keep the property | All registered owners sign. Romanian sale tax for individuals: 3% of the transaction value for a holding of up to three years, and 1% thereafter |
| Judicial decision and recognition in Romania | There is no agreement | The longest and most expensive route |
A sale also has an Israeli side: capital gains tax in Israel should be checked with a tax adviser.
What happens to the Romanian mortgage after the divorce?
The loan agreement does not change by itself. Whoever signed as a borrower remains liable to the bank, even if the divorce agreement provides that the other spouse will pay. The charge remains registered on the property, and any transfer of the property or change in the identity of the borrowers requires the bank's consent. You therefore talk to the bank before signing the partition agreement, not afterwards.
What can be arranged on the day of purchase?
- A prenuptial agreement that expressly addresses assets outside Israel. For it to be valid in Israel, it must be approved by a court or a religious court; if it is signed before the wedding or at the wedding, notarial certification is sufficient.
- A written choice of law. Articles 2590-2591 of the Romanian Civil Code allow the spouses to choose one of three: the law of the state in which one of them has habitual residence, the law of the state of which one of them is a citizen, or the law of the place where they first lived together after the wedding. An express document is required, dated and signed by both parties.
- A registration that reflects the money. If each of you contributed a different amount, shares can be registered accordingly in the land register extract, for example 70/30.
- Evidence of the source of the money. Funds received by inheritance or as a gift, for example from parents, do not enter the balancing, provided this can be shown in documents.
How do you prepare, and how do we support this stage?
The question “what will happen to the property if we separate?” sounds unpleasant, but it is part of planning the registration properly. When we accompany a couple in a purchase, we examine how the registration will be made, whether a prenuptial agreement or a choice of law is needed, and which questions should be referred to a family law lawyer in Israel. Acts in Romania itself, such as a partition agreement and a change of registration, are performed by a Romanian notary and a lawyer licensed to practise in Romania.
The content of this article is general information only and does not constitute legal or tax advice. The applicable law depends on the date of the marriage, the place of residence, citizenship and the agreements between the spouses, and every case requires review by a family law lawyer in Israel and by a lawyer in Romania.
Frequently asked questions
Which law applies to a villa in Romania in the divorce of an Israeli couple?
For a couple who married and live in Israel, usually Israeli law. Romania does not apply EU Regulation 2016/1103, and the Romanian Civil Code refers to the law chosen by the spouses and, absent a choice, to the law of their common habitual residence. A couple who moved to Romania needs an individual review.
The villa is registered only in my name. Is it mine in the divorce?
Not necessarily. Under the Spouses (Property Relations) Law, the balancing of resources concerns the value of the assets of both spouses, excluding assets held before the marriage, inheritances and gifts. A villa bought with joint money may be included in the balancing even when only one spouse is registered.
Is an Israeli judgment enough to change the registration in Romania?
Not on its own. A division of property in an Israeli judgment requires recognition proceedings before a Romanian court under Article 1095 of the Code of Civil Procedure, and sometimes enforcement proceedings as well. Where there is agreement, a partition agreement before a Romanian notary is faster.
Can the property be sold during the divorce?
Yes, if all registered owners sign, and in coordination with the bank if there is a mortgage. The Romanian tax for individuals is 3% of the transaction value for a holding of up to three years and 1% thereafter, and in Israel capital gains tax should be checked.
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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.