What happens to our Property after Divorce?
Dealing with the half share, of a jointly owned property
Dealing with your jointly owned property after a divorce can be very frustrating. Luckily, our attorneys are here to help!
The first step is to look at the settlement agreement / divorce order.
A settlement agreement is a contract, in terms of which the parties to a divorce regulate the division of their assets. This agreement is made an order of court, and as such it must be followed to the letter.
Secondly, we look at “how” the parties were married.
If the two parties were married in community of property, the property may be transferred by way of an endorsement on the Title Deed, meaning the property is transferred by bringing on a “stamp” on the current Title Deed. This is done in accordance with Section 45 of the Deeds Registries Act, 47 of 1937. Consequently, it is not needed to register a completely new Title Deed. No transfer duty payable by the Purchaser.
If the parties were married out of community of property, the process to be followed would be the same as for any other property transfer, where one party sells his half of a property, and another party purchases this half in the immovable property, except that there will be no transfer duty payable by the Purchaser.
Financing the property
The parties have three options:
- The one party (Purchaser of the other half of the property) can take over the ownership of the property, by having the current bond cancelled, and a new bond registered into his/her name. This is naturally subject to credit approval for the full outstanding amount of the bond. It must be noted that there will be a cost to cancel the existing bond, plus the registration of the new bond. In some instances, the bank will insist that this course of action is the only option for the Purchaser.
- In the alternative, the parties may opt to apply for a Substitution of Debtor, whereby the one debtor will be substituted as the sole debtor. This is done in terms of Section 57 of the Deeds Registries Act, which will be discussed extensively in our next article.
- If a spouse does not obtain the necessary credit approval, the final option would be to sell the property, settle the loan, and divide the profits in accordance with the settlement agreement.
Your first step must always be to contact a trusted attorney that regularly deals with property and conveyancing matters, as you will need expert advice. Contact our office today, to speak to one of our property experts.