A Property24 reader who broke up with her partner wants to know what the best way is to settle the bond - since her ex does not want to sell the property.
"My partner and I have a joint bond, we are not married and I am not the one paying the bond, he is.
"We broke up and we can't be living in the same house. I want him to buy me out but it seems like it’s a procedure and he can't afford to. So he refused to sell the house and I can't move on when I know my name is on the house, and I did contribute.
"What can I do to sell it or make him to sell?”
Property24 Guest Expert Jaco Rademeyer has the following Advice:
In circumstances such as the above where many variables are at play, it’s often best to start with the aspects which are clear and not up for questioning. With this in mind, the following points are worth noting:
- The banks are not concerned about the internal affairs of the parties to the agreement. Irrespective of the presence or lack thereof of a co-ownership agreement, the parties are jointly and severally liable to the bank for the full debt. This is the case no matter who contributed more or less. Furthermore should the parties default in payment, this would result in the lapse in credit worthiness of both parties.
- Dissolving the joint bond and joint ownership is not as simple as merely removing the name of a party off of the relevant title deed or bond. It requires many formal processes such as a bond cancellation, registration of a new bond and the transfer of a ‘half share’ in the immovable property. Depending on the full value of the property, transfer duty could also be payable upon the transfer of the half share.
- Should the parties have entered into a co-ownership agreement and a dispute arises between them over any aspect relevant to the joint ownership & bond, the terms of such agreement should be consulted in order to bring about the necessary remedy. However, in the absence of such agreement, the legal presumption would apply that the parties own the property in equal shares. They would then have to consider the few options available to them, which will be elaborated on very briefly below.
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Firstly, in the event that one of the parties wishes to sell, the other party can buy that parties half share. Always remember however that the consent of both parties is required unless by order of court. This process is often the most practical answer but the costs of exercising this option is often the catch.
As an example, if the property is currently valued at R1 million, the half share would be R500k. In order to purchase the half share, an affordability assessment would need to be conducted to see if the party wishing to purchase the half share is able to do so.
If so, the bond for the R1 million would have to be cancelled, which involves – possibly a cancellation penalty - as well as an attorneys bond cancellation cost, the registration of a new bond for the purchasing party which involves an attorneys bond registration fee and of course the transfer of the half share with the transfer fees payable to the conveyancer whom attends to the transfer.
There are further other disbursement costs and fees which also add to the total bill and transfer duty if the value of the property exceeds R1 million.
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Secondly and possibly a solution to the Property 24 reader’s situation above - if the purchasing party cannot afford to buy the half share of the selling party, a trusted 3rd party could enter the process and purchase the half share.
In this event, the process would be somewhat similar to the above where the outcome is favourable to all the relevant parties. The 3rd party would of course first undergo the affordability assessment and credit checks beforehand.
Thirdly and lastly, after considering the options above and realising the associated costs, it may be enough motivation for the parties to consider selling the property altogether.
Needless to say, whichever option is exercised, the process can only be effectively carried out where the parties work together in good faith. This requires compromise, transparency and due diligence regarding the long and short term implications of any decisions taken.
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