Joint ownership is not all love and romance

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.

The process to approval for extending a Sectional Title Unit

The upside of co-buying a property

One of the major reasons behind co-buying a property with a partner is to gain access to greater finance in order to afford the home of your dreams. Financial institutions will use your combined income to determine affordability, giving couples a better chance of bond approval for the desired amount.

While this is the primary benefit associated with going into a property purchase with a partner, there are other up sides such as sharing in an exciting and momentous step together.

The potential risks

As with most big life decisions, there are always risks that go hand-in-hand with the benefits and a property purchase is no exception.

It’s important to consider these potential risks carefully before diving into a joint property purchase. For example, the financial stability of both parties needs to be considered. Should one of the partners find himself or herself in financial difficulties, it can have severe consequences for both parties, including the risk of forfeiting the property if repayments are not made on time.

In addition, there is also the risk of a couple breaking up, and without a marriage or antenuptial contract to facilitate the dissolution of a joint estate, there can be unpleasant disputes.

Managing the risk

The best way to preempt and avoid any unforeseen and unpleasant consequences is for the two parties purchasing property together to enter into a written agreement. This contract should stipulate all relevant details relating to the property agreed by the partners, including who will be responsible for mortgage payments (and in what amounts), rates payments, levies, water and electricity costs, and general maintenance of the property.

It is worth noting, however, that while this agreement will be in force, both parties will remain liable jointly and severally to various institutions who have a financial interest in the property (e.g. a bank for the mortgage amount or a municipality for rates).

As such, both parties should take great care in ensuring all matters relating to the property are always in order and up to date.

It is also advisable to consult with a legal professional to assist in drawing up an appropriate co-ownership agreement prior to purchasing a property.

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

Recommended for you

The difference between movable and immovable property
Contractual Matters

What happens if a mistake is made during the transfer of a property?[post_view before=""]

It’s an unfortunate reality that mistakes do sometimes occur in deeds and documents during the transfer process. Fortunately, however, the Deeds Registries Act makes provision for mistakes of this nature to be rectified.

Read More
What Happens To The Ownership Of My Property When I Get Married
Contractual Matters

Customary marriages and ownership of immovable property[post_view before=""]

Recognition of customary marriages in South Africa has undergone several shifts over the years through the implementation of new legislation. This has impacted not only the legal status of the parties to a customary marriage but also their ownership of and rights to matrimonial property.

Read More
My name has changed - what happens to my property’s title deed?
Contractual Matters

Rules Board Regulates Non-litigious Fees[post_view before=""]

The introduction of the Legal Practice Act 28 of 2014 has led to several changes in the juridical space, including one related to non-litigious fees – fees charged by attorneys for services that do not constitute litigation and are not finalised in court.

Read More
My name has changed - what happens to my property’s title deed?
Contractual Matters

Corporate actions and resolutions[post_view before=""]

In South Africa, the business and affairs of a company must be managed by its board of directors. As such, the board is responsible for the daily corporate and commercial affairs of the company.

Read More
Minors and immovable property
Contractual Matters

Defunct Homeowners Associations and Consents to Transfer[post_view before=""]

Title deeds of cluster developments commonly contain a condition which states that alienation or transfer of a property by the owner is not allowed unless consent from the Homeowners Association (HOA) is provided. Usually inserted by the relevant local authority when approving the cluster development, this type of condition also confirms that all subsequent owners of the property automatically become members of the HOA.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

Joint ownership is not all love and romance

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.

The process to approval for extending a Sectional Title Unit

The upside of co-buying a property

One of the major reasons behind co-buying a property with a partner is to gain access to greater finance in order to afford the home of your dreams. Financial institutions will use your combined income to determine affordability, giving couples a better chance of bond approval for the desired amount.

While this is the primary benefit associated with going into a property purchase with a partner, there are other up sides such as sharing in an exciting and momentous step together.

The potential risks

As with most big life decisions, there are always risks that go hand-in-hand with the benefits and a property purchase is no exception.

It’s important to consider these potential risks carefully before diving into a joint property purchase. For example, the financial stability of both parties needs to be considered. Should one of the partners find himself or herself in financial difficulties, it can have severe consequences for both parties, including the risk of forfeiting the property if repayments are not made on time.

In addition, there is also the risk of a couple breaking up, and without a marriage or antenuptial contract to facilitate the dissolution of a joint estate, there can be unpleasant disputes.

Managing the risk

The best way to preempt and avoid any unforeseen and unpleasant consequences is for the two parties purchasing property together to enter into a written agreement. This contract should stipulate all relevant details relating to the property agreed by the partners, including who will be responsible for mortgage payments (and in what amounts), rates payments, levies, water and electricity costs, and general maintenance of the property.

It is worth noting, however, that while this agreement will be in force, both parties will remain liable jointly and severally to various institutions who have a financial interest in the property (e.g. a bank for the mortgage amount or a municipality for rates).

As such, both parties should take great care in ensuring all matters relating to the property are always in order and up to date.

It is also advisable to consult with a legal professional to assist in drawing up an appropriate co-ownership agreement prior to purchasing a property.

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