The family home on divorce: who stays in the house, who pays the mortgage and what happens afterwards

Use, ownership and mortgage: three separate questions

Most arguments about the house get tangled because three things are run together. Use — who lives in it after the divorce — is decided by the divorce judgment under art. 96 CC and looks above all to the children. Ownership — whose it is and in what shares — depends on the matrimonial property regime and on how it was bought, and is resolved on the winding up of the sociedad de gananciales or on the division of a co-ownership. The mortgage is a debt owed to the bank which the divorce does not change: it is owed by whoever signed for it, normally jointly and severally (the bank can claim the whole of it from either of you), whether or not they live in the house.

Separating the three questions is the first step towards finding a way out. You can have the use without being an owner, be an owner without being able to use it, and go on paying the mortgage on a house you do not live in.

Who stays in the house: art. 96 CC

• With minor children and sole custody: the uso de la vivienda familiar is given to the children and to the parent they live with, until they all reach full age; if one of them has a disability, the court may extend it. This is the general rule and the one that admits least argument.
• With shared custody: there is no automatic rule. The court decides in favour of the spouse most in need of protection and for a limited period, normally until the common property is divided or the house is sold (applying art. 96 CC by analogy, on the case law of the Tribunal Supremo), or gives the house to one spouse with compensation. The courts have generally rejected «nesting» — the children stay and the parents take turns — save by agreement, because of the conflict it generates.
• Without children, or with adult and independent children: the use may be given to the non-owning spouse, or to the co-owner most in need, always for a reasonable period; it is not a right for life.
• The use granted to a spouse can be brought to an end, by way of a variation of the orders, if that spouse lives in the home on a settled basis with a new partner (full-court judgment of the Tribunal Supremo 641/2018), as well as on the expiry of the period or the children becoming independent.

That right of use can be registered at the Registro de la Propiedad, the Land Registry, and protects against a sale: the owner cannot dispose of the home without the consent of the spouse using it or the authorisation of the court (art. 96 CC).

Who pays the mortgage

The mortgage is not an «expense of the marriage» but a debt of the sociedad de gananciales (or of the co-owners): it is paid by the borrowers in equal halves, regardless of who lives in the house, on the settled case law of the Tribunal Supremo. The divorce judgment does not treat it as an expense of the marriage (full-court judgment of the Tribunal Supremo of 28 March 2011), but it may take that payment into account when fixing the maintenance, or regulate provisionally how it is met, on account of the winding up; whatever one spouse pays over their share is reimbursed to them there (art. 1364 CC).

As against the bank, nothing the spouses agree binds it: if one stops paying, it claims against both. So where one spouse takes the house, the novation of the loan has to be negotiated with the lender in order to release the other, which requires the one staying to have sufficient means. Without that release, the spouse who moved out remains liable for the debt on a house that is no longer theirs.

What to do with the house afterwards: the three ways out

Allocation to one spouse with compensation

One spouse takes the home and pays the other their half, in money or with other assets from the division. The law gives them no preference by reason of living in it (art. 1406.4.º CC recognises that only for a surviving spouse): failing agreement, the allocation will depend on the contador-partidor‘s proposal or, if the house is held in co-ownership, on what the two of you agree (art. 404 CC). It calls for the house to be valued on a market basis and for the mortgage to be taken over by novation.

Sale and division of the proceeds

The cleanest solution where neither of you can or wants to keep it: the house is sold, the mortgage redeemed and the rest divided according to the shares and the reimbursements. If the house is burdened with a right of use in favour of the children, the sale requires the consent of the spouse holding that use or the authorisation of the court.

Keeping it in joint names

Sometimes the decision is to keep the house in co-ownership while the children are minors and sell it afterwards. That is legitimate, but it is worth setting down in writing who pays what, how the use is compensated and when and how it will be sold. If later on one of you wants out and the other does not, the route is to bring the co-ownership to an end: allocation to one with compensation, or sale by public auction if there is no agreement (art. 404 CC).

Special situations

• A home that is one spouse’s separate property (bought before the marriage or inherited): its use may still be given to the children and the other spouse, but the ownership is not divided; mortgage instalments or refurbishment paid for with common money are counted as a reimbursement.
• A home belonging to one spouse’s parents allowed to be used rent-free: the use awarded in the divorce does not bind the owners, who can recover it by way of possession proceedings; the courts have allowed this repeatedly.
• A rented home: the spouse who did not sign may continue the tenancy if the use is awarded to them, by notifying the landlord within two months of being served with the judgment (art. 15 of the Ley de Arrendamientos Urbanos, the Urban Tenancies Act).
• A second home: it is not the family home; it is divided on the winding up with no rule about use.
• Unmarried couples with children: the use may be given to the children and the resident parent through the procedure for orders on children born outside marriage; ownership follows the rules of co-ownership, not those of the sociedad de gananciales.

Deadlines worth not letting slip

• Use awarded where there are minor children lasts until they reach full age; without children, or under shared custody, the court fixes a reasonable period, which is worth proposing with figures attached.
• Two months is what the spouse awarded the use of a rented home has to notify the landlord (art. 15 LAU).
• The municipal land value tax and transfer tax do not fall on the allocation of the home in payment of a half share of the common property; a sale to a third party is taxed like any other sale, with the roll-over relief where the proceeds are reinvested in a main home and its conditions are met.

Where we work

Our office is in Villanueva de la Cañada, and we act regularly in Brunete, Villanueva del Pardillo, Valdemorillo, Quijorna, Majadahonda, Las Rozas, Boadilla del Monte, Pozuelo de Alarcón and the rest of western Madrid. Divorces are heard by the court of first instance for the last matrimonial home; where the spouses already live in different judicial districts, the party bringing the claim may choose between that last home and the respondent’s residence (art. 769 LEC). Villanueva de la Cañada, Brunete, Quijorna and Boadilla del Monte belong to the judicial district of Móstoles; Valdemorillo and Villanueva del Pardillo to that of San Lorenzo de El Escorial; Majadahonda and Las Rozas to that of Majadahonda; Pozuelo de Alarcón has its own. This guide forms part of our divorce practice.