Case Analysis | Can One Go Back on an Agreement to Add My Name to the Property Title?

Zou and Zhao registered their marriage in 2007. The two began to live apart due to marital estrangement in 2012, and Zou filed a divorce lawsuit against Zhao in 2013. During the litigation, Zou submitted a Housing Co-ownership Agreement signed by both parties on November 30, 2011. The agreement stipulated that the real estate purchased by Zhao in his personal name before marriage shall be jointly owned by Zhao and Zou, with each party holding 50% of the property right; however, no property right change registration was completed. Zou now claims division of the real estate, while Zhao asserts the right to revoke the gift given that the property has not been transferred by registration.

The first-instance court held that in accordance with Article 6 of the Judicial Interpretation (III) of the Marriage Law of the People’s Republic of China: Where parties agree to gift real estate owned by one party to the other before marriage or during the subsistence of marital relationship, and the donor revokes the gift before completing registration of title transfer of the gifted real estate, if the donee requests the people’s court to order specific performance, the people’s court may apply Article 186 of the Contract Law.

Since the disputed real estate still remains registered under Zhao’s name without change of registration completed, Zhao is entitled to revoke the gift pursuant to the aforesaid legal provisions. Accordingly, the stipulation granting Zou a 50% property right under the Housing Co-ownership Agreement has not taken effect.

Dissatisfied with the first-instance judgment, Zou filed an appeal. The second-instance court held that no property right registration change had been completed after the signing of the Housing Co-ownership Agreement. The first-instance court’s ruling that the agreement had not taken effect was supported by sufficient facts and legal grounds and was properly decided. The appeal was therefore dismissed, and the original judgment upheld.

In judicial practice, there are currently two mainstream viewpoints on whether either party may unilaterally exercise the right of revocation under a marital property agreement concluded for adding a spouse’s name to a property purchased by one party before marriage.

Article 19 of the Marriage Law of the People’s Republic of China stipulates that spouses may agree that property acquired during marriage and property owned before marriage shall be owned separately, jointly, or partially separately and partially jointly.

Accordingly, the marital property agreement signed by both parties constitutes the voluntary and genuine expression of intent of the parties. It does not violate the mandatory provisions of laws and administrative regulations, nor impair public interests or the legitimate rights and interests of third parties. The agreement shall be valid and binding on both spouses. Therefore, neither spouse has the right to unilaterally exercise the right of revocation.

Article 6 of the Judicial Interpretation (III) of the Marriage Law of the People’s Republic of China stipulates: Where parties agree that real estate owned by one party shall be gifted to the other party before marriage or during the subsistence of marital relationship, and the donor revokes the gift before completing the registration of title transfer of the gifted real estate, while the donee requests the people’s court to order continued performance, the people’s court may handle the case in accordance with Article 186 of the Contract Law.

Article 186 of the Contract Law of the People’s Republic of China provides that a donor may revoke a gift before the transfer of rights over the gifted property. The foregoing provision shall not apply to gift contracts for public welfare or moral obligation purposes such as disaster relief and poverty alleviation, or notarized gift contracts. Accordingly, either spouse may unilaterally exercise the right of revocation.

The author endorses the first viewpoint. The Contract Law mainly regulates civil and commercial legal acts between equal civil subjects. By contrast, marital property agreements often involve multiple factors such as marriage, property, personal status and emotional relations between spouses, representing the result of comprehensive interest consideration and balance by both parties.

Once a marital property agreement takes effect, both spouses must exercise rights and perform obligations in accordance with the agreement, and the distribution of marital property interests shall also be governed by the valid agreement.

Article 136 of the General Principles of the Civil Law of the People’s Republic of China stipulates that a civil juristic act shall take effect upon its formation, unless otherwise prescribed by law or agreed by the parties. An actor may not arbitrarily alter or rescind a civil juristic act unless otherwise stipulated by law or consented to by the other party.

Therefore, both spouses shall strictly abide by the property agreement and may not alter or revoke it at will. If alteration or revocation is truly necessary, it shall be made in writing only after consensus reached through negotiation by both spouses.