An investment apartment is often the couple’s largest asset after their home. It is also a common source of disputes: who paid the deposit, who repaid the mortgage, and who owns the rise in value.
An apartment bought before the marriage
Under the Spouses (Property Relations) Law, an asset one spouse owned before the marriage is generally excluded from the balancing of resources. In real life things get complicated: the mortgage is paid from the joint account, the rent goes into the joint account, and a renovation is funded with money from both of you. In such cases the courts examine whether a partnership in the asset arose, so it is better to set the answer in advance in the agreement.
What the agreement should cover
- The property itself: it remains owned by the spouse who bought it, or becomes joint, and in what share.
- The rent: whose income it is, and where it goes.
- Mortgage payments: if paid from joint money, whether the other spouse receives a refund or a share in the property.
- Appreciation: whether it is shared.
- Selling and buying a replacement property: whether the new property stays separate.
An apartment abroad, for example in Cyprus
More and more Israelis buy investment apartments in Cyprus, Greece or Portugal. An Israeli prenup also covers assets abroad, but to enforce it there it must be recognised in the country where the property is registered. The agreement should identify the property, its registration and the law governing the property relations, and a local lawyer should confirm there is no additional requirement. On the purchase itself see buying property in Cyprus.
Buying an investment apartment together
Even when you buy together, the shares are not always equal. One of you contributed more of the deposit, or one set of parents helped. Unequal shares can be registered at the Land Registry, and the agreement can settle what happens to each share on separation. See also parents helping to buy an apartment and a prenup.
Before buying, also check the legal aspects of the deal itself. See buying an investment apartment in Israel: what to check.
Next steps
Every couple comes with different circumstances, so the agreement should be built around yours. At Paz Israel & Co. Law Office we review your assets, your plans for the future and the right approval route with you. To learn more about the process, see our prenuptial agreement lawyer page, or contact us to arrange a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information about Israeli law and is not legal advice or a substitute for reviewing your specific circumstances.