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.

7290

Recommended for you

Minors and immovable property
Contractual Matters

What does the Coronavirus lockdown mean for your Offer to Purchase?

40770

We are experiencing unchartered territory with the current lockdown due to the Coronavirus and while it is impossible to predict what the future holds or have immediate answers to what this might mean for each property related scenario, we can offer some advice to those who have signed an Offer to Purchase prior to or during the lockdown in South Africa.

Read More
Your Trusted Partner in Residential and Commercial Property Transfers
Contractual Matters

Rectifying information on a title deed

39861

A title deed is the formal record of who the current owner is of a specific piece of land so naturally, making sure that this information is accurate and up to date is incredibly important.

Read More
Curatorship - what does it mean to be put under curatorship?
Contractual Matters

Documents required for transfer of property

49342

We know that paperwork isn’t everyone’s favourite thing, and while the property transfer process does require quite a few documents, it needn’t be overwhelming for buyers or sellers. That’s why we’ve put together this list of documents required for transfer of property.

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

What should I know about bond registrations and cancellations?

47823

For the majority of property buyers, taking out a bond to help finance the purchase of their dream home is an essential step of the process. The good news for Snymans clients is that our experienced team can guide you through the process…

Read More
Minors and immovable property
Contractual Matters

Effective Cause – who earns estate agent commission?

53849

An estate agent can be an invaluable asset in helping you secure a quick and lucrative sale, but in cases where more than one agent might be marketing your property, how do you know who you owe commission to when a sale is concluded?

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.

7290