Buying one party’s share of a jointly owned property

There are a number of ways to deal with the undivided shares in fixed property held by two or more people. In the case of joint ownership by married persons, one such way is by one party becoming the sole owner of a property. The process for this will depend heavily on the matrimonial regime selected at the time of marriage.

Property Blog Articles | Advice | Contractual Matters | Market News

Terms of the settlement

The settlement agreement between the spouses will dictate how the fixed property registered in both their names will be dealt with. For example, if one spouse is awarded the house in terms of the settlement, the other party’s half share will have to be transferred to that party and the marital regime will dictate how this transfer is to be done.

If the parties were married in community of property, the transfer of the half share may take place by way of endorsement in the Deeds Office in terms of Section 45 of the Deeds Registries Act, 47 of 1937. This is an abbreviated form of transfer done by way of application, specifically catering for marriages in community of property being dissolved as a result of divorce or death. If the parties were married out of community of property, the transfer of the half share will have to be done by way of conventional transfer. In other words, the process followed will be the same as with the typical purchase and transfer of a property.

By law, a share in fixed property is an undivided share and can only be equated to percentages and not to a specific portion of the property. The transfer of an undivided share will take the same time as a normal transfer subject to the parties and the shareholding being uncomplicated and certain.

Transfer fees

The transfer fee payable in a situation where one spouse is buying the other’s share in a jointly owned property will be based on the value of the property as a whole. Transfer duty will be calculated on the value of the whole property and then divided by the relevant percentage held.

Financing of the property

A bond registered over a property held in the name of more than one party can be dealt with in one of two ways, subject to the bank’s credit approval. Firstly, the existing bond can be cancelled and a new bond be registered in the name of the remaining sole owner. This can be quite a costly exercise as there will be a bond cancellation and a registration fee, however, in certain circumstances a bank may insist on this course of action.

Alternatively, the one debtor/owner can be substituted as the sole debtor/mortgagor under the bond. This will be done in terms of an application to the Deeds Office to this effect in terms of Section 57 of the Deeds Registries Act. The bondholder will have to consent to this application and  the costs of such application will be less than the aforementioned cancellation and registration.

The simplest course of action before initiating a transfer of ownership to one of the property’s co-owners is to consult with reputable conveyancing attorneys who will be able to offer advice on how best to proceed depending on the specific case.

Follow Snymans on Facebook for more legal information, tips and news about property.

5841

Recommended for you

Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Beetle free certificates

2743

There are a number of compliance certificates that a seller is required to submit to confirm that the property is in good condition, prior to concluding a sale. Some of these certificates are only required under specific circumstances, for example the borer beetle certificate.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Joint ownership is not all love and romance

2785

There’s no denying that it’s tough to break into the property market and that doing this with your partner can be both a financial imperative and an exciting and romantic idea. While there are certainly benefits to jointly buying a property with your partner, it’s also important to go in with your eyes wide open for this endeavour to have the best possible chances of success.

Read More
Property Transfers | Bond Registrations | Snymans Attorneys
Contractual Matters

Making your property work for you – the do’s and don’ts of running a guesthouse

2871

Opening a guesthouse can be a lucrative endeavour, but before taking the plunge and converting a residence into a financially rewarding business, there are important steps to be followed and considerations to be taken into account.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Immovable property and inheritance

5941

According to South African law, an individual has the right to dispose of his or her estate as he or she wishes by stipulating this in a will. However, this right may be limited when in the public interest.

Read More
Snymans Attorneys | Residential and Commercial Property Transfers
Contractual Matters

This is your year for a successful property sale

5914

A new year always brings with it endless opportunity and is the perfect time to forge ahead with new plans and make the first move to achieve goals. If your aim is to sell your property, then follow these keys steps in helping to make sure it’s a successful and lucrative process.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

Buying one party’s share of a jointly owned property

There are a number of ways to deal with the undivided shares in fixed property held by two or more people. In the case of joint ownership by married persons, one such way is by one party becoming the sole owner of a property. The process for this will depend heavily on the matrimonial regime selected at the time of marriage.

Property Blog Articles | Advice | Contractual Matters | Market News

Terms of the settlement

The settlement agreement between the spouses will dictate how the fixed property registered in both their names will be dealt with. For example, if one spouse is awarded the house in terms of the settlement, the other party’s half share will have to be transferred to that party and the marital regime will dictate how this transfer is to be done.

If the parties were married in community of property, the transfer of the half share may take place by way of endorsement in the Deeds Office in terms of Section 45 of the Deeds Registries Act, 47 of 1937. This is an abbreviated form of transfer done by way of application, specifically catering for marriages in community of property being dissolved as a result of divorce or death. If the parties were married out of community of property, the transfer of the half share will have to be done by way of conventional transfer. In other words, the process followed will be the same as with the typical purchase and transfer of a property.

By law, a share in fixed property is an undivided share and can only be equated to percentages and not to a specific portion of the property. The transfer of an undivided share will take the same time as a normal transfer subject to the parties and the shareholding being uncomplicated and certain.

Transfer fees

The transfer fee payable in a situation where one spouse is buying the other’s share in a jointly owned property will be based on the value of the property as a whole. Transfer duty will be calculated on the value of the whole property and then divided by the relevant percentage held.

Financing of the property

A bond registered over a property held in the name of more than one party can be dealt with in one of two ways, subject to the bank’s credit approval. Firstly, the existing bond can be cancelled and a new bond be registered in the name of the remaining sole owner. This can be quite a costly exercise as there will be a bond cancellation and a registration fee, however, in certain circumstances a bank may insist on this course of action.

Alternatively, the one debtor/owner can be substituted as the sole debtor/mortgagor under the bond. This will be done in terms of an application to the Deeds Office to this effect in terms of Section 57 of the Deeds Registries Act. The bondholder will have to consent to this application and  the costs of such application will be less than the aforementioned cancellation and registration.

The simplest course of action before initiating a transfer of ownership to one of the property’s co-owners is to consult with reputable conveyancing attorneys who will be able to offer advice on how best to proceed depending on the specific case.

Follow Snymans on Facebook for more legal information, tips and news about property.

5841