The Danger of a Missing Signature: A Look at Guarantor Spousal Consents in the Southwest

By Craig K. Williams, David W. Wilhelmsen, Amanda M. Manke, and Heather Reed¹

This article examines the importance of spousal consents in Arizona and New Mexico. Under Arizona law, lenders cannot enforce a guaranty against community property if the guarantor’s spouse did not consent to it. New Mexico law, meanwhile, takes a more tangled road but ultimately leads prudent lenders to the same conclusion.

In community property states, obtaining consent from a guarantor’s spouse is crucial for a lender seeking to enforce a guaranty against property jointly owned by a guarantor and their spouse. Both Arizona and New Mexico are community property states. Consequently, absent a prenuptial agreement, property and debts acquired by one spouse during marriage are considered the jointly owned community property of both spouses. This means that a married guarantor’s spouse likely has a legal stake in some or all of the assets subject to recourse under a guaranty. To protect this interest, many community property states require lenders to secure a written consent from the guarantor’s spouse. Without such consent, enforcing a guaranty against a guarantor’s community property could be challenging or impossible.

Spousal Consent to a Guaranty in Arizona

Under Arizona law, lenders must obtain spousal consent from a guarantor’s spouse when executing a guaranty.² Failure to do so will prevent a lender from pursuing community property to satisfy the guaranty. This restriction is intended to safeguard spouses from obligations incurred by guarantors without their knowledge or consent.³

If a lender fails to obtain spousal consent, they will only be able to collect from a guarantor’s separate property.⁴ This failure could have significant consequences if the value of a guarantor’s community property exceeds the value of their separate property. In such a situation, a lender may limit their ability to recover the full amount of the debt owed by a guarantor by not obtaining spousal consent. To protect the ability to enforce a guaranty against the entirety of a guarantor’s property, lenders in Arizona must obtain spousal consent to guaranties.

Spousal Consent to a Guaranty in New Mexico

New Mexico caselaw addressing whether a lender can enforce a guaranty against community property without spousal consent is sparse, and the absence of specific statutes in New Mexico addressing the need for spousal consent to guaranties creates further confusion.

There are New Mexico statutes addressing spousal consent requirements for other obligations or debts incurred by only one spouse.⁵ For example, New Mexico statutory law prohibits a spouse, acting alone, from obligating community property to indemnify a surety company.⁶ However, it is unclear how broadly these statutes can be applied to the enforcement of a guaranty against community property. New Mexico’s inconsistent caselaw applying these statutes presents conflicting guidance to lenders on their ability to enforce a guaranty against community property without spousal consent to the guaranty.⁷ For this reason, past form opinion letters from the State Bar of New Mexico have contained an exclusion with respect to a married guarantor’s community property absent a consent from their spouse.⁸ Additionally, choice-of-law issues may arise if the couple owns property in other jurisdictions.⁹ The laws of those jurisdictions, particularly regarding the need for spousal consent to a guaranty, may limit a lender’s ability to enforce a guaranty if they fail to obtain spousal consent that might be required under other states’ laws.¹⁰ 

While New Mexico statutory law does not explicitly require spousal consent for guaranties, its inconsistent approach toward recourse against community property without the consent of both spouses makes it a prudent practice for lenders. This approach minimizes the risk of future complications in enforcing a guaranty against a guarantor’s community property and aligns with New Mexico’s long standing public policy of protecting spouses’ interests in community property.¹¹

Footnotes 

1. Heather Reed is a 2024 summer associate at Snell & Wilmer and a 2025 J.D. candidate at the University of Arizona. She is not admitted to practice law. [Back]
2. Ariz. Rev. Stat. § 25-214(C), § 25-215(B). [Back]
3. First Cmty. Bank v. Gaughan (In re Miller), 853 F.3d 508, 517 (9th Cir. 2017) (quoting Vance–Koepnick v. Koepnick, 197 Ariz. 162, 163, ¶ 6, 3 P.3d 1082, 1083 (App. 1999)). [Back]
4. Separate property includes assets acquired prior to the marriage, and inheritance or gifts received by the guarantor during the marriage. Ariz. Rev. Stat. § 25-213(A). [Back]
5. N.M. Stat. Ann. § 40-3-4, § 40-3-13(A). [Back]
6. Section 40-3-4 prohibits a spouse from obligating community property when the spouse solely enters a contract to indemnify a surety company. In 1987, the New Mexico Supreme Court addressed the scope of Section 40-3-4 as limited to “contracts of indemnity with surety companies” when it held that community property would not be protected from enforcement of a promissory note provided as collateral for a corporate debt. Lubbock Steel & Supply, Inc. v. Gomez, 105 N.M. 516, 518, 734 P.2d 756, 758 (1987). Similarly, Section 40-3-13(A) requires spousal consent for all transfers, conveyances, or mortgages of community real property if the term of the lease exceeds five years. In 1983, the New Mexico Supreme Court prohibited the encumbrance of community property to satisfy a guaranty signed by only one spouse. First State Bank v. Muzio, 100 N.M. 98, 99, 666 P.2d 777, 778 (1983). The New Mexico Supreme Court later overturned Muzio, holding that a bank was entitled to rely upon community property to collect a debt created by one spouse. Huntington Nat’l Bank v. Sproul, 116 N.M. 254, 263-64, 861 P.2d 935, 944-45 (1993). However, this case did not specifically concern enforcement of a guaranty against community property, so there is still ambiguity on lenders’ ability to collect from a guarantor’s community property if the guarantor’s spouse did not consent to the guaranty. [Back]
7. Id. [Back]
8. John P. Burton, Commercial Lending Law in New Mexico (Second Edition), RODEY LAW FIRM (July 2016), https://www.rodey.com/wp-content/uploads/2022/05/rodey_commerical_lending_law_in_new_mexico.pdf. [Back]
9. See Brenholdt v. Brenholdt, 94 N.M. 489, 612 P.2d 1300 (1980). [Back]
10. See Cayce v. Carter Oil Co., 618 F.2d 669 (10th Cir. 1980). [Back]
11. See English v. Sanchez, 110 N.M. 343, 346, 796 P.2d 236, 239 (1990); N.M. Stat. Ann. § 40-3-4 (“It is against the public policy of this state to allow one spouse to obligate community property . . .”). [Back]