When a couple separates and one party moves out of the house, it can cause concern about the ongoing payment of the mortgage. Arrangements should be entered into as soon as possible regarding payment of the mortgage. Even missing one month’s mortgage payment can affect both parties’ credit ratings. If the mortgage is not paid for a period of time then the mortgage lender can take steps to repossess the property.
If the mortgage is held in the joint names of a couple then they both have a joint and several obligation to pay the mortgage. That means the mortgage lender can pursue either of them for payment.
As a result of this, if one person pays the full mortgage, then that person may be able to argue that he or she should be entitled to repayment of half of the sum from the other party in due course. However, if the mortgage is only in one person’s name, then they have the obligation to pay the mortgage alone. On occasions, the party who is required to pay the mortgage can seek payment of aliment or maintenance from the other party depending on their respective financial circumstances.
Although the party who continues to pay the mortgage can argue that he or she should be reimbursed for half of the mortgage payments in the event that the house is transferred to him or her, there are counter arguments. These were examined in the recent case of Fox v Fox at Stirling Sheriff Court. In that case, the Sheriff decided that fairness was established by splitting the value of the house equally at the date on which the house was transferred. Mrs Fox had to continue to reside in the house with the child of the marriage and had paid the mortgage in its entirety since the date of separation.
The Sheriff took the following factors into account:
- Somebody had to move out and it was not unreasonable that Mr Fox had allowed Mrs Fox to stay in the house with the child;
- Mr Fox was not unreasonable in renting rather than buying until the financial aspects of the divorce were concluded and he had incurred significant expenses in renting another property;
- Mr Fox’s rental costs were not unreasonable;
- Mrs Fox had the benefit of living in a three bedroomed detached house in a good location;
- Mrs Fox had been living with a new partner, but had not sought any contribution from him for living costs.
Accordingly, taking the above factors into account, the Sheriff took the view that the sum spent by Mrs Fox was offset by Mr Fox’s own living costs in the same period.
The question of reimbursement for mortgage repayments is not straightforward and is one upon which specialist advice should be sought.
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