Preferential allocation (attribution préférentielle)

On a partition, not every asset has to be sold or drawn by lot. The person who lives in the family home, who runs the business or the farm, may ask to be allocated it: this is attribution préférentielle (preferential allocation). The asset goes into their share and, if it exceeds their entitlement, they compensate the other parties with a soulte (equalising payment). The mechanism exists in inheritance, in divorce (partition of the marital community or of joint property between spouses) and more generally in the partition of any indivision (joint ownership).

In some cases the allocation is “as of right”: the court must grant it if the conditions are met, for instance to the surviving spouse who asks for the home in which they lived at the time of death. In other cases it is discretionary: the court weighs the interests at stake. On divorce, it is never as of right.

Where the rule comes from

Articles 831 to 834 of the French Civil Code govern preferential allocation: an agricultural, commercial, craft or professional business (article 831), the dwelling in which the applicant lives and professional premises (article 831-2), allocation as of right of the home to the surviving spouse (article 831-3), an agricultural holding (article 832). Article 834 provides that the assets allocated are valued at the date fixed by article 829, that is the date closest to the partition, and that the equalising payment is due in cash unless the parties agree otherwise. Article 1476 applies these rules to the partition of marital community property, specifying that the allocation is never as of right in that case.

In a valuation report

I provide the market value of the property at the date closest to the partition, as the date of separate enjoyment will be fixed. Where the applicant already occupies the property, I value it with vacant possession, because the recipient keeps it in full ownership and his own occupation justifies no discount. I set out the elements that may weigh on the discussion: works carried out by one of the parties, condition of the property, rental value for a possible occupation indemnity. The report gives a range and a point value; if the value used by the court or the parties is old and the market has moved, an update may be requested, since article 828 allows an equalising payment due at a later date to be revised where the value has changed by more than a quarter.

Example

On the husband’s death, the widow asks for preferential allocation of the house in which the couple lived, valued at €300,000 at the date closest to the partition. The estate also includes €100,000 in cash and there are two children as heirs. The widow, who has opted for one quarter in full ownership, is entitled to €100,000 out of an estate of €400,000. The allocation is as of right; she receives the house and owes an equalising payment of €200,000, payable in cash unless the children agree to instalments. Had the house been taken at €260,000 on a valuation two years old, the equalising payment would have been €40,000 lower, to the children’s detriment.

Not to be confused with

Licitation (court-ordered sale) is the auction of an asset that no one keeps. Attribution éliminatoire (article 824) allows the party who asks for partition to be bought out of the joint ownership. The equalising payment is the financial consequence of the allocation, not the allocation itself.