What happens to the guarantee when the guarantor passes away?

What happens to the guarantee when the guarantor passes away?

 

The dream of having a home in property has led many families to have to endorse with one of their properties the purchase of a floor with mortgage on the part of their children or grandchildren. This, in addition to posing a risk for those relatives who decide to endorse , may also place a burden on other family members if they die before the end of the term, usually the life of the mortgage.

Before applying as a guarantor the house of parents or grandparents, normally already paid, we must ask ourselves this question What happens if the guarantor of the mortgage passes away? The deceased the guarantor ends the guarantee?

It should be clarified that there are mainly two forms of endorsement : personal guarantee or endorsing with a property owned by the guarantor as a mortgage guarantee.

In both cases, even if the guarantor dies, the guaranty remains valid unless the contrary is expressly stipulated in the document in which the guarantor is constituted. If the heirs accept the inheritance the guarantee will extend to all of them , with their present and future assets.

The Civil Code, in article 1,847 establishes that the obligation of the guarantor is extinguished at the same time as that of the debtor, and for the same reasons as the other obligations. Article 1,156 of the aforementioned Civil Code states that “Obligations are extinguished: for payment or fulfillment, for loss of the due thing, for the forgiveness of the debt, for the confusion of the rights of creditor and debtor, for the compensation , And for novation . ”

From the above, it follows that if the mortgage was not canceled before the death of the guarantor, after the death, the assets and debts would be inherited and among them a house that serves as collateral in a mortgage, that is, the responsibility of the guarantor passes To all his heirs.

In this situation the heirs have three options:

  • Reject inheritance
  • Accept the inheritance and take responsibility for the guarantee, which affects not only the inherited housing, but also their own present and future assets.
  • Accept inheritance to “benefit inventory”, that is, heirs accept the inheritance but do not take personal responsibility for the debts that they could assume upon receiving the inheritance. Accepting the benefit of inventory, only the liabilities that the inheritance brings with the assets that are accepted from it, will be answered, without affecting the personal assets (present and future) that the heir has.

The latter option, accepting the inheritance for the benefit of inventory , is most advisable if we inherit a home that serves as mortgage guarantee, because if the bank executes the guarantee for non-payment of the mortgage , only the inherited property will be answered.