Co-owning a property can be messy
The feuds between Noma and her three adult siblings really spiralled out of control when their widowed mother passed away and the four found themselves co-owners of her house.
As the eldest sibling, Noma believed that she had the right to continue living in the property. After all, it was the only property that she had ever lived in and she had taken care of her mother until her demise.
Her siblings, however, had different ideas. Noma’s divorced sister immediately moved in as she needed a place to stay, while the other two wanted to sell the house to take their share in cash.
Marike Ehlers, a conveyancer with SSLR Incorporated, says multiple ownership of a single property is a mess in 80% of cases because each owner usually has a different intention for the property.
Also, there are no automatic rights. What you are entitled to as a family member is determined by a will and if your family member dies without a will, then the assets, including a property like in Noma’s case, are divided in terms of the rules of intestate succession. This law determines who inherits and in what order, starting with immediate family such as the spouse and children.
Many South Africans find themselves co-owning a property, sometimes by choice and other times by default.
You cannot simply verbally agree between yourselves that, for instance, the eldest sister can keep the house and pay the siblings in monthly instalments to relinquish their share of the property.Marike Ehlers, a conveyancer with SSLR Incorporated
If you did not specifically choose to get married out of community of property, you will by default be regarded as being married in community of property. And, if either you or your spouse own a property, you will both automatically have an undivided 50% share in the property. This applies even if the property is registered in the name of one spouse only, Ehlers says.
Problems arise in joint property ownership when marital relationships sour or when heirs disagree about what should be done with a jointly inherited property.
Ehlers says her firm generally advises against registering a property jointly in the names of heirs, unless the siblings get on well and plan to rent out the property.
In all other cases, the conveyancers advise heirs to draw up a redistribution agreement to rearrange the inheritance of assets in the estate if one heir wishes to keep the house, she says.
It is also possible for one party to buy out the share of the co-owner. For instance, in a divorce agreement the husband may agree to pay out his wife with other assets for her share of the property.
But, says Ehlers, there are processes and procedures to follow to legally transfer a share in a property to another person. You cannot simply verbally agree between yourselves that, for instance, the eldest sister can keep the house and pay the siblings in monthly instalments to relinquish their share of the property.
If, for instance, the parties agree to sell a property that they inherited together, the Deeds Registries Act requires that the property must first be transferred from the deceased person into the names of the family members that inherited the property, and then to a new buyer, she says.
Co-owning a property with someone that refuses to sell their share of the property to either you or an outside buyer, can be problematic. You can approach a court for direction but even a court cannot order someone to sell their share of a property unless there are sound grounds for doing so.
If you’re on the verge of divorce and co-own a property with your spouse, make sure your divorce decree stipulates what must happen to the property, says Ehlers. If you fail to reach an agreement, a court can make a ruling which must be incorporated in the divorce agreement.
Ehlers says if you live with a partner and decide to buy a property together, make sure you draw up an agreement that stipulates how the property will be dealt with should you split up. The agreement could, for instance, state that either of you has the right to buy the other person’s share and if this is not doable, the property must be sold and the proceeds split.