During these difficult financial times all over the world, it is noticeable that the rate of increase in the number of divorces is escalating. It is to an extent correct to say that money does not bring (we add necessarily) happiness, but financial difficulty surely does not help a marriage. In Cyprus the rate of divorces over the last couple of years has increased by 15% and we expect this escalation will continue helped by the economic situation.

Of course the worse consequence of a divorce is the breaking up of a family especially when there are children involved and a well known advocate told us that “divorces and statutory tenant cases are the most heartbreaking with the opposite parties having a long drawn battle with an extreme ferocity”.

We appear at regular intervals as an expect witness regarding the valuation of real estate for divorcing couples and we have experienced this and at its worse, both parties bring the children to court, in hope to attract the judge’s sympathy. Unlike for example the U.K., the matter of the couples’ real estate in Cyprus is much more complicated. In most cases both parties contribute to the acquisition/development of the estate, sometimes the land/building plot belongs to one (before marriage) and the building is erected on it by both (after the marriage), in other cases relatives of one party contribute manual work in order to help the couple, others contribute in cash (for tax or other reasons) in “black” money, thus increasing the lack of proof on the contribution by each party etc etc.

Usually the valuation date is set to be the date that the couple has separated and depending who is going to buy the property off the other spouse, the “buyer” wishes to have the value as low as possible and the “seller” as high as possible. It goes without saying that a valuer/expert witness must be completely unbiased and independent and we suggest that in such cases there is one joint valuer (thus saving court time and cost) and where possible the valuer is to inspect the property with the parties involved present (most unlikely) or inspect the property twice with each spouse be present at each time. There are most useful statistics regarding building costs through the Government, whereas in terms of values land or otherwise, one should adopt comparable sales (recorded as such by the Lands Office).

If a valuer is correct and the parties are being “reasonable” then there should be no major problem in agreeing. More educated couples usually appoint a joint valuer for the purpose, so that the disputes are limited. A major problem that has surfaced recently, with the downward trend of values, is that a couple’s say house which costed X a couple of years ago, it is now assessed approximately X-20%, thus creating a problem by itself. Divorces in some cases cause the closing down of business, where the (e.g.) husband places a joint property in mortgage to secure business loans and in addition the wife (usual demand by Banks and Co-Ops) signs as a guarantor. In such cases the wife not only loses her share of the property, but a pledge is also placed on her other property being a guarantor. Recent protests by numerous unfortunate divorced women, has brought this on the surface and although they have our sympathy, it is very difficult to come up with a solution i.e. the Bank giving a release from their guarantees/mortgages. In addition divorce cases bring up secret accounts which might attract the tax authorities to carry out an investigation (in one case once the tax people when they completed their investigation, there was no asset left to speak about).

In the U.K. the situation is much more straightforward. We are involved in the U.K. divorce cases (on the subject of real estate) and our experience so far (around 20 cases p.a.) is that real estate is handled in a much more professional way. A joint valuer is usually appointed, the parties are not directly involved (only through their solicitors-hence there is no emotion) and the parties agree based on their advocate’s advice (not like Cyprus where the whole family from each side has a say!!).

Each country (Cyprus-U.K.) has its own divorce laws regarding the split of family assets and depending on where one is married (domicile), the law of that particular country applies (not where the asset is), but they are mainly on similar lines. The Americans have come with a pre-marriage agreement which states clearly how the couple’s assets are split up in case of a divorce. It has not caught up in Europe to a large extent and not in Cyprus at all. Perhaps this pre-marriage agreement is quite useful in such an event, notwithstanding the “coldness” of such an action a few days prior to a wedding and with the Cyprus attitude for locals, the “joining of the two into one” will most likely prevent it from happening.

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