Photo Credit: Yao Yao

Severance Pays

Legal experts challenge the merits of ‘fake divorce’ to a heated property market

Even by Chinese standards, it was an eye-opening figure. This March, in the small village of Jiangbei, Jiangsu province, some 160 couples filed for divorce at the same time. But this wasn’t some outbreak of marital discord—the couples, some in their 80s, were merely taking advantage of the fine print in proposals to redevelop their village as a “high-tech development zone.”

Jiangbei’s homeowners all faced compulsory demolition and relocation to local government-built housing—but single residents could qualify for more property, plus around 131,000 RMB (19,000 USD) extra in compensation, compared to married couples. Hence the rush to “divorce”—as one villager told the Nanjing Morning Post, “Everybody is doing this. We’ll deal with the consequences later.” Local divorce attorneys soon began to charge triple their usual fee of 5,000 RMB.

Experts warn that the local government may not honor the extra payouts if couples are found to be exploiting loopholes by, for example, remarrying soon after. Others point out that those who do split for financial reasons may end up arguing over the proceeds, and harm their relationships anyway. These warnings have done little to stop the growing popularity of “fake divorces.”

In August 2016, civil affairs bureaus across Shanghai were flooded by hundreds of couples lining up to part ways because of rumors about an imminent restriction on existing property owners buying more houses. As the real estate market in Shanghai rose an average 5.6 percent in the last week of August, Wind Info, a financial information service in China, described the phenomenon as like “drinking poison in riotous celebration.”

Some local governments are finding ways to stymie the scam. Beijing, which requires buyers to pay higher deposits for each home bought after the first one in an attempt to cool its overheated property market, released a policy on March 17 clarifying that anyone who has taken out a mortgage is now considered a property owner. Buyers cannot evade the deposit scheme even if they are divorced and without a house registered in their name.

The practice of fake divorce is not a particularly recent one. Back in 2013, a spate of phony separations prompted Shanghai’s Minhang District Civil Affairs Bureau to famously put up signs cautioning, “Proceed carefully with divorce due to a risky real estate market.”

And some fake divorces can prove all too real. In March, 44-year-old Beijing resident Mr. Li sued his ex-wife Ms. Wang for the apartments Wang took in her name, after they divorced in order to dodge restrictions on purchasing a third property. But post-divorce, Wang refused to resume the nuptials. These situations have become so recognizable that a fake divorce turned real formed the plot of recent hit I Am Not Madam Bovary, which went on to win Best Picture at the Asian Film Awards.

Similar cases spring up every day across the country. We invited two experts to weigh in on the topic of fake divorce, and whether it’s a reasonable move to maximize profit—or a recipe for marital mayhem.

Dr. Ye Zhusheng,  

Law professor at the Law School of the South China University of Technology

In Chinese, the character for family is “家,” which consists of a roof and a pig underneath. The pig represents an important part of the family’s livelihood. A family therefore signifies people living under the same roof to pursue a prosperous life. The character cleverly combines both  spiritual and material elements to form a family. Whoever coined this character, however, never would have expected “fake divorce” to become a trend. In this sense, divorcees give up the spiritual element for material benefit.

To better understand this phenomenon, the first question we must consider is if the policy has affected the stability of marriage.

Though purchasing restrictions have led to some fake divorces, they have not necessarily shaken the stability of marriage in general. If a family has only one apartment, many people will be discouraged from getting divorced. Those in better economic circumstances are more open to the option because, if they own two houses, each can get one after they split. The most important economic concern in a divorce, housing, is removed.

From a long-term point of view, if price-control policies become effective and people no longer purchase houses as investments, fewer people will get fake divorces…I’ve read a study that suggests couples are less likely to get divorced during economic depressions. Does that mean we should actively create recession to strengthen marriages?

From the perspective of the relationship, when marriage is no longer a goal but a tool to achieve something else, the institution itself becomes depreciated. In fact, marriage is indeed not the ultimate goal. The most restrictive system ensures the lowest divorce rate, but does it mean people are blessed with happier lives? Of course not. Therefore, stable marriages are advocated but it doesn’t mean all policy should be designed around that aim.

Secondly, there are all kinds of factors to consider when it comes to marriage, and policy is just another one of these. Fake divorcees are criticized because they choose financial benefit over relationships, but it’s only human nature to seek benefits, which is beyond reproach. Let’s not forget that the fake divorce is a decision made by both parties. To provide for one’s family is considered more important than the marriage per se. Others may get divorced because of exceptional circumstances (bankruptcy, debts etc.) to protect the other party. This does not devalue their marriage; instead, it shows the strength of the relationship.

Faced with the same restrictions policy, some couples are unmoved; others are willing to get a fake divorce, which means giving up the legal protection of their union. As long as they are clear-headed making these choices and willing to take responsibility, no one should be blamed for their actions.

Wu Jiezhen,

Director of the Marriage and Family Law Department, F&P Law Firm

Legally, fake divorce carries a very high risk. Once things go south, it’s difficult to protect your rights. After the couple receives the divorce certificate, or the divorce mediation from the court, the marriage is dissolved. Neither the court nor the Bureau of Civil Affairs will investigate your intentions, no matter what they are.

Legally, there’s no such thing as a “fake divorce.” Even if it surfaces afterwards that the arrangement was to evade debt, emigrate abroad, or for the sake of children’s education, the certificate and mediation won’t be cancelled. The termination of the relationship cannot be mandatorily reversed, which is to say: The law can’t force the two parties to resume marriage.

There was a regulation that allowed the Bureau of Civil Affairs to withdraw a divorce certificate if it was found to be obtained under false pretenses, and declare the divorce invalid. But this rule has since been struck down.

Secondly, the property division agreement of a fake divorce is difficult to overturn legally. There’s always a lack of evidence needed to do so.

According to the judicial interpretation given by the Supreme People’s Court regarding the Marriage Law, [divorce] agreements can only be voided if there proves to be coercion and fraudulence. However, is fake divorce fraudulent? There’s dispute in judicial practice. In some cases, the court has decided that the property can be redistributed because there was no real intention [to divorce]. But in other cases, courts have confirmed the original agreement because fake divorce is not considered fraud.

Obviously, unfair agreements can be voided according to civic laws and the Contract Law, but when it comes to divorce agreements, such requests are not always supported. Mainstream judicial opinion doesn’t consider divorce agreements as entirely equal to financial agreements. With both parties’ emotions, family responsibilities, and other issues involved, it’s impossible to decide if such an agreement is fair based solely on property division.

Signing a supplementary agreement to the divorce arrangements is a way to protect your rights, but in reality, most people have no notion of doing this, because they haven’t realized the full risk of a fake divorce. Even if you did sign one, I’ve see people literally tear them up behind their partner’s back once they are divorced.

Whatever your best intentions, once you get divorced, it’s for real. And you can’t force the other party to remarry. If that’s a consequence you are unable to bear, do not say yes to a fake divorce.

Severance Pays is a story from our issue, “Wheel Life China.” To read the entire issue, become a subscriber and receive the full magazine.


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