OP here
What does it say in the mortgage contract?
Ah jpd - you can't be asking me logical questions like that!!
[Background: I'm helping someone do an itinerary of her husband's affairs in order to be able to give a sensible file to the solicitor for probate purposes. As I go through the affairs, various questions strike me. Some are easy to clarify with a bit of googling, etc. but other questions, like this one, are less clear-cut. For now, I don't have access to all the deceased's files which is why I can't answer Jpd's very sensible question.]
We will be getting legal advice - and so will get to the bottom of questions like this and others - so why am I posting at all? I think it's because.....
1. I'm very impressed with the info one gets on this site
2. It's interesting to get the experience of others
3. It's a useful way for me to record points of detail that I need to understand
4. I like to assimilate info as I go along and like getting into the weeds!
For the AAM community, it's clear that what's happened here is not best practice - e.g. no assigned life-cover coupled with no formal agreement. In the case I'm involved in, there is no question that we will renege on the mortgage so, in reality, the question is almost academic for me. It could be that there are people reading this thread who are in a similar arrangement who might benefit more from this thread than me.......by taking this thread as a prompt to now put formal agreements in place where necessary!
FWIW, my suspicion is that Clubman is right in that, in the absence of an agreement, the remaining party is liable for the mortgage. My understanding is that the property is still owned jointly by the estate of the deceased and his friend. If I'm correct, this seems like a terribly unfair default situation?? I'd really like to know, either way, if I am correct or not. I'm hoping that there's someone on AAM will set me straight!
Finally, in relation to life cover, my personal experience (which I think is similar to the situation in relation to the deceased) is that I dabbled in a few properties and had very substantial life cover - some of which was expressly assigned to a particular property, some not. In other words, sometimes banks lent money on the basis of the big-picture collateral/net-worth/life cover/human capital, etc. rather than always requiring life assurance contracts to be individually assigned to given properties.