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The Supreme Court in Spain has ruled that the obligation to repay a mortgage on the matrimonial home is a contractual obligation that requires both of the spouses to honour those obligations separately. Accordingly, where both spouses agreed to pay half of the mortgage when mortgage was arranged then this may not be modified as part of the terms of the divorce to require the spouse that has more financial resources to pay a greater percentage. In short, that debt which marriage has united may not be separated by divorce.
The judgment of the court, which sets precedent, brings to an end the many and various methods by which regional courts have used to divide the obligation to make mortgage repayments – often taking as a base, the income of both of the spouses. Of course this often led to the situation of one of the spouses being forced to pay 100% of the mortgage.
The logic of the decision is based on the fact that in Spain a married couple are typically considered to have created a ‘sociedad de gananciales’ which is like a matrimonial economic ‘pot’. That which the couple earn during the course of the marriage is put into this economic ‘pot’ and should the marriage end then the ‘pot’ is shared equally. This is the case even where one of the spouses has contributed a great deal more financially than the other.
According to the judges in the Supreme Court, a distinction needed to made between those assets and obligations which form part of the marital economic ‘pot’ and ongoing obligations such as the gas bill, school fees etc. The former must be divided equally between the spouses whereas the latter could be determined according to the ability to pay which in turn, depends upon the financial resources available to each of the spouses.
The court judgement will have a profound impact on the economic situation of both spouses after the divorce and there are a number of points worth noting.
The court judgment is not retroactive so, for anyone who wishes to appeal their personal situation must go through the normal channels of making an application to the court for a variation of the terms of their divorce on the basis of a change in their economic circumstances.
Secondly, it has been pointed out that the spouse who would otherwise have benefited from having reduced mortgage repayments may now instead benefit from increased alimony payments. When deciding on whether or not to award spousal maintenance, a judge will ordinarily look at all of the economic circumstances of both of the spouses. Accordingly, the fact that both spouses must pay half of the mortgage may vary the tendency to award spousal maintenance awards relatively sparingly.
Thirdly, is the fact that as far as the bank is concerned, failure by one or other of the spouses to pay their part of the mortgage installment is irrelevant – failure by one to pay is failure of both to comply with their joint obligation.
The judgment is still relatively recent and will require time to be analysed by jurists and the effect on future judgments remains to be seen.
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