Joint property ownership can be a fantastic way to step onto the property ladder, especially when partnering with friends, family, or significant others. However, it's essential to understand the intricacies involved to ensure a smooth co-ownership experience.
Let's take a look at the top things you need to know about joint property ownership rights in South Africa.
Understanding ownership rights
What happens to the property if one co-owner dies?
In South Africa, most co-owners hold property as “tenants in common”, meaning each person owns a specific – not necessarily equal – share. If one owner passes away, their share is distributed according to their will or intestate succession laws. It does not automatically go to the surviving co-owner(s).
“Having a clear agreement in place is important to prevent complications in the event of the death of a co-owner,” says David Jacobs, Regional Manager at the Rawson Property Group. “It’s also strongly advisable to make sure all co-owners have an up to date will.”
Can one owner sell their share without the other owner's consent?
Unless otherwise specified in the agreement, a co-owner can sell their portion of the property without the other party’s consent. However, this could introduce an unfamiliar partner into the ownership arrangement, making things more complicated.
“We always recommend drafting an agreement that outlines exactly how shares can be sold or transferred to protect everyone’s interests, equally,” says Jacobs.
What happens if I want to sell because I need the money?
If you need to sell but your co-owner doesn’t, you may struggle to find a buyer willing to purchase just your share. Jacobs says the best option, under these circumstances, is to negotiate a buyout or agree to sell the entire property together.
Financial responsibilities for joint owners
Who is responsible for mortgage payments and property taxes?
According to Leonard Kondowe, National Manager at Rawson Finance, mortgage responsibilities for joint owners are shared, and each owner is equally liable for repayments – even if one stops paying their share.
“Ordinarily, these expenses would be divided according to the ownership share, so if you own 30% of the property, you’d pay 30% of the bond and 30% of the property taxes,” he says.
What happens if one co-owner stops paying their share of expenses?
If a co-owner fails to contribute to bond repayments, rates, or maintenance, the remaining owner(s) must cover the shortfall to prevent penalties or even foreclosure.
“A well-drafted co-ownership agreement should specify how costs are divided and what happens in cases of non-payment,” says Kondowe. “Options include a grace period with or without penalties or interest charged on outstanding amounts; a buyout clause; or – in extreme cases – a forced sale.”
Selling a jointly owned property
What happens if one owner wants to sell and the other doesn’t?
When one party wishes to sell and the other refuses, the seller can apply to court for an order to force a sale. This is known as “actio communi dividundo”, a legal action that ensures fair division of co-owned property.
“A well-drafted co-ownership agreement will help avoid this kind of costly legal battle,” says Jacobs. “It should outline clear exit strategies, such as a mandatory buyout option or mediation clauses to resolve disputes before resorting to court action.”
Can I buy out my co-owner’s share?
Yes, if one owner wants out, the other can buy out a co-owner’s share, provided they can afford it. Getting an independent property valuation helps ensure the price is fair.
What legal steps can I take if there is a dispute over the property?
Legal disputes in joint property ownership can be costly and stressful. If negotiations fail, Jacobs says mediation is often the next best step before resorting to legal proceedings.
“Again, a written agreement beforehand can prevent conflicts down the line,” he says. “A good contract can protect joint owners from all manner of difficulties.”
How to divide proceeds from the sale of a joint property?
When selling a jointly owned property, the sale proceeds are typically split according to ownership shares. However, any outstanding debts (such as unpaid mortgage amounts or municipal accounts) must be settled before dividing profits.
The bottom line
Co-owning property can be a great investment, but only if everyone plays by the rules. A solid agreement, open communication, and a clear exit strategy can save you from serious financial headaches down the road.
As Jacobs puts it: “The best time to plan for problems is before they happen. A good contract isn’t just a safety net – it’s a game plan for success.”
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