SPECIAL ARRANGEMENTS FOR THE REVERSE MORTGAGE FROM THE POINT OF VIEW OF THE SPANISH INHERITANCE LAW

Abstract

The Reverse Mortgage or Lifetime Mortgage is a private instrument used as finance assistance for the retirement. This contract consists on a loan with even a building society or a credit company that is guaranteed with the dwelling, which shall be returned upon the owner's death. The reverse mort-gage was introduced in our Legislation through the Law 41/2007 of December the 7th that reformed several dispositions relating to the mortgage market. The main purpose of this law was to incentive the procurement of reverse mortgages. Therefore he made the access to some tax free advantages dependent on the compliance with several objective and subjective requirements. Moreover, he also regulated the juridical consequences of some of the characteristics that inform the Lifetime Mortgage institution. And this new way in which the Law stablishes these consequences makes the Lifetime Mortgage regime a particular one. One of the specificities of the Law is that the debt is due only after the borrower's death. As a consequence, the credit guaranteed with the contract results in an inherited debt which therefore seems to be regulated by the general inheritance law regime. However, the Law 41/2007 has limited the responsibility of the inheritors in such a way that if the debt is not returned, its liquidation will only be extended to the goods that conform the inheritance. This legal provision is an exception to the Spanish principle of universal patrimonial li-ability set out in Article 1911 of the Civil Code.