Did your spouse give permission?: Legal Insights

From Attorney at Law Suhendra Leon. This email address is being protected from spambots. You need JavaScript enabled to view it.

When I say I have a special interest in family law, most people think I like doing divorces. But it is a misconception that family law only entails divorces. The first book of the Civil Code that regulates family law consists of 462 articles, with topics ranging from birth to death.

Some articles also have implications for third parties that are not in a family-relationship with each other, for example, how a creditor should deal with a debtor married in a marital community of property. This article will deal with one of such articles with implications for third parties, namely article 1:88 of the Civil Code.

Article 1:88 of the Civil Code states that permission of a spouse is required for the execution of certain legal acts by the other spouse. With this article, the legislator aims to protect a family's living environment.

First, permission of a spouse is required if agreements are entered into that serve to alienate, encumber or give the marital home and household goods in use to third parties. Examples are selling, renting or mortgaging or terminating the lease agreement of the marital home.

If parties occupy the home during the marriage, permission is required, even if the house is only owned by one of the spouses or the lease agreement was entered by one of the spouses. If you enter into such agreements with a person, it is of the utmost importance to verify that the person is married, and to request that the spouse gives permission for the agreement. In some instances, the permission must be in written form, but I recommend to always request written permission.

For gifts or donations that are excessive and uncommon, a spouse will also require permission of the other spouse. What is excessive and unusual depends on the financial situation of the spouses. If someone is used to donating US $1,000 to his grandchild every year, it is not excessive and unusual, but it will be if the income of the person declines severely.

When providing collateral for third parties, permission of the spouse is required. An exception to this general rule is in cases of collateral for a “naamloze vennootschap” or “besloten vennootschap” of which the spouse is the managing director, and holds most of the shares and such collateral is required in the normal business practice of the entity.

If a married person uses their private assets as collateral for a company, a well-informed financier will request written permission of the spouse to avoid any doubt. In such cases, it remains important, as always, for the spouse from whom permission is required to carefully read what they are signing. Are you giving permission or also providing collateral with your own or shared assets?

Finally, permission is also required for purchases for which it is agreed that the payment will be in instalments. An exception is made in case the purchased goods are intended for the normal business practice of the spouse.

If one of the above legal acts has been performed without the necessary permission, the spouse from whom the permission was required can annul the legal act. The consequence of that is, for example, the collateral on a loan will cease to exist. However, the law does protect the third party if it was in good faith. Such protection does not exist if this third party was the receiver of a gift without permission of the other spouse.

The case-law shows that this article was used frequently in the Netherlands when private persons were sold complicated financial products that ultimately entailed that they purchased shares that were paid in instalments. I bet that local banks also encountered problems with spouses annulling collaterals in the past. This shows that family law is not to be underestimated as being solely about divorces, as it can have implications for financial transactions.

For the readers who have spouses lavishing other women/men with expensive gifts, I hope I have informed you of the legal possibilities to get that car back that was purchased by your spouse for that third person in your marriage.