Jointly owned spanish property.
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Jointly owned spanish property.
Hello Emerald -Gem,
The dissolution of a jointly owned property ownership is of a very straightforward nature, however, when the property has a mortgage on it, the real dissolution depends on the bank, as they have to accept that the mortgage responsibility is now put on one payer, therefore stopping them from being able to claim funds from two people, and the reduction in solvency this means. So even if the property was 100% owned by your husband, the bank would still be in its right to go against the assets of you both if - in case the mortgage was not paid and therefore the house was repossessed - the house was auctioned and the profit made did not cover the debt.
The only way to have guarantee you have no further responsibilities and are totally freed from the mortgage is that the bank accepts the subrogation of the full mortgage in your husband´s name, signing in Public deeds on the day of the dissolution is formalized at the Notary.
This option is rarely accepted by the bank for logical reasons; a sole person has less financial capacity to face the monthly mortgage fee than two, at least in the bank´s opinion. The general practice is that the dissolution is made without informing the bank of the new situation and the party that keeps the property faces the mortgage payments as usual. You can sign a formal document that establishes that in case the bank took legal actions against you (who are no longer co-owner), your husband will be held responsible. This would obviously be an agreement made by you two, but not binding concerning the bank.
Another possible option is that in case your husband owned a second property, he could set up an additional mortgage on it and then cancel the mortgage of the Spanish property with that amount to be able to do the Joint property ownership dissolution, getting your 50% share.
Once you are determined to formalize the dissolution the process is simple: Both parties appear at the Notary ( In Spain ), personally or by a representative holding a Power of attorney ( you can both be represented by the same solicitor, therefore using a joint POA ) and sign the deeds that will establish that your husband is taking possession, in accordance with the agreement accepted in the divorce settlement formalized in the UK, of the 50% ownership belonging to you, assuming the responsibility for the remaining due mortgage. This deed is then registered at the Land Registry and from that moment on your husband will be the sole owner of the property.
The fees such a process attracts are: Notary and Land Registry fees and then the Stamp Duty Tax, depending on the ratable value of the property. Additionally, the solicitor fees if you decide to take legal aid ( normally, 0.5% plus VAT of the minimum fiscal value).
If you wish, you can contact me directly and I will be able to offer a quotation.
Regards,
Hi Patricia,
I am in the process of divorcing my husband in the UK.
As part of the settlement I am seeking transfer of our jointly owned Spanish property to him. He has made it quite clear before a Sheriff that he would like to keep the property.
There is an outstanding mortgage on the property and I need to be certain that I will not be liable for any monies if he defaults on the payments at a future date.
As it seems highly unlikely that I will be discharged by the bank from the mortgage, is there a formal, legal document which my husband and I could sign which explains he will be responsible for the ongoing payments? If so, does this mean that the bank will not chase me for any outstanding payments?
Also, should the UK court decision explicitly specify that the property is to be transferred and that my ex will assume full responsibility for the remaining mortgage payments?
I would be most grateful for your reply at your earliest convenience.
Many thanks.
Hello Djop,
The joint ownership dissolution transaction is not directly related to the mortgage, that is, the bank has full right to refuse to put the mortgage in one sole name. The divorce settlement can establish that your husband keeps the property but the mortgage deeds follows another route and the bank are free to check if your husband meets the financial requirements so you can be released from the mortgage, and finally registering your husband as sole mortgage title holder.
I recommend you to first liaise with the bank as if they refuse to modify the mortgage title, no matter what the court order of consent determines, and no matter if you are no longer a registered owner of the property, the bank will still be able to claim you pay the debt in the event your husband fails to do it. I suggest you deal with the bank prior to the divorce settlement.
Regards,