Legal Articles

Ken and Busi, are a young couple who graduated from college last year and recently secured employment. They have been together for 6 years.

Securing permanent employment came with tears of joy, as they are now hopeful that their plans of settling down will start to take shape. At the centre of those plans is jointly owning a home before marriage, a home they have since identified just a few blocks from where Busi rents an apartment.

Joint Bond Ownership in South Africa

Upon telephone inquiries at ABC Bank, they were advised that it is possible for them to take joint bond in their names, and purchase a house. What a time to be alive, could there be a better way to celebrate your youth than acquiring real assets that last and can be passed down for generations? 

Busi liked to imagine one day soon, several of their college friends and family coming to grace their housewarming party to celebrate the new home with them.

Due to the fact that Ken earned almost a half times more than Busi, he decided that he would foot the bond repayments alone - at least until Busi was on her feet someday.

Co-Ownership Agreements in South Africa

What a gentleman, his mother surely raised him very well. However, having been a past client and happy with the service she received, Ken’s mother advised him to consult with Van Deventer & Van Deventer Incorporated before applying for the bond, so that he can be advised on whether his arrangement with Busi is in best interest.

Ken came to our office for a consultation a few days later. We told him a sad story, but as things turned out, the sad story we told Ken turned out to be the story that changed everything. This is because we gave him options to ensure that his own story ends up as a happy one.

Below is the story that we told Ken.

“Ken, what you just told us makes us remember what happened in the case of Claassen v Quenstedt and Others (1199/2011) [2014] ZAECPEHC (25 March 2014). A couple had purchased a property together while intending to marry. No agreement as to any of their arrangement was concluded. The Defendant had paid for the deposit on the property, rates, maintenance costs and towards the bond repayment itself.  

Subsequently the relationship deteriorated and ended. The Defendant stayed behind whilst the Plaintiff moved out of the house.

Both parties saw it fit to have the property sold, but there were fundamental questions at the centre of this issue, which had to be dealt with by the Court. Firstly, whether the arrangement between the parties was a co-ownership, or partnership as alleged by the Defendant. Secondly and in the event of the property being sold, how were the proceeds going to be divided? Thirdly, whether the Defendant who remained in the house should pay rent to the Plaintiff who decided to move out of the house. Fourth and finally, whether the Defendant could demand payment from the Plaintiff with regards to Plaintiff’s contribution towards bond repayments, rates, maintenance and the deposit that was already paid by the Defendant.

As for the first and fourth questions, the Court determined that the arrangement between the parties was not a partnership but co-ownership, and therefore some of the so called “debts” had prescribed as they started to run from the time the cause of action arose. As to the second question above, the Court determined that after the house is sold, the proceeds must settle all balances and arrears, then the residue be divided equally between them. The third issue, a co-owner is an owner and could not be expected to pay rent for living in a house that he has an undivided share in ownership.

Had the parties concluded an agreement initially, it would have prescribed what happens in the event that the relationship ends and/or the process of terminating co-ownership. The dispute would have been managed better and ended as predictably as possible because the dictates of the contract would have been followed easily.

We totally understand that it is fun and bliss, bubbles and butterflies in romance but, not concluding an agreement when entering into arrangements like these, is definitely something that is not in best interest. We strongly advise you to reduce the agreement into writing. A verbal agreement is like writing something on sand dunes, when the wind blows over sand dunes in the desert, they easily and quickly change their shape while disappearing in the same breath. Hearts and feelings change, and so do words not cast in stone.”

Ken subsequently asked us to draw up a co-ownership agreement for him and Busi.

Van Deventer & Van Deventer Inc. - Attorneys & Conveyancers South Africa

We believe he made the right decision because while revelling at their housewarming party that Busi wants to organise, they will be at peace knowing that their interests are secure and cast in stone. Ken was also pleased that within our group we have Phoenix Bonds, which assists home seekers with finding mortgage bonds that have more favourable terms. They specialise in bond origination and bridging finance. He immediately utilised their services.

We specialise in various types of contracts, which we prepare in such a way that your rights and interests are secure, protected and legally enforceable the way they need to be.

Contact us for comprehensive assistance.   

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