To rely or not to rely (on public registers)?
When purchasing from individuals, you cannot always rely on the information that it is his/her separate property. Depending on the legal framework, the tax implications may also vary. The Baltic angle
Contents: legal regulation (when property is joint property of spouses and when it is separate property) in Estonia, Lithuania, and Latvia. Taxes. Conclusions.
In Estonia
If registered in the land register – only one of the spouses
In our northern neighbors, property acquired during cohabitation belongs to both spouses or partners by default. However, this is not always reflected in the relevant registers, where often only one of the spouses is listed as the owner. This could cause certain practical problems.
For example
..if someone wants to purchase real estate registered to one of the spouses, they should check not only the land register, but also the publicly available register of spouses in Estonia to make sure that the spouses have not chosen a different regime, such as separation of property.
In a 2017 case...
...the Estonian Supreme Court ruled that even the notary had made a mistake by not checking that the property belonged to both spouses. In addition, the court also found that the entry in the real estate register stating that the property belonged to only one of the spouses was incorrect. Thus, in essence, the court placed the family’s property relations above the property rights reflected in the land register.
What are the consequences of this?
The buyer essentially risks having the transaction contested if they have purchased real estate from one spouse without the consent of the other spouse, because they have not checked the property register of the spouses and partners. This was decided by the Estonian Supreme Court a year later, allowing the deceived spouse to recover the sold property in joint ownership.
The same applies to capital shares
Furthermore, this regulation applies not only to real estate, but to any property. In 2022, a woman in Estonia managed to regain ownership rights to shares in two Estonian companies. Her husband had previously disposed of these shares by investing them in a Maltese fund, thereby preparing his pension fund. The woman succeeded despite the fact that only her husband was listed as the owner of the shares in the Estonian Securities Register (depository) and later on the NASDAQ stock exchange.
