- A couple had registered two properties in their names jointly,
- Then on divorce, they fought over whether the proceeds should be split either
- 50/50 (per the wife’s claim that her husband had donated half shares to her), or
- Pro rata to their respective contributions (per the husband’s claim that the properties were “joint ventures”),
- The Court held for the husband in regard to one of the properties, and for the wife on the other, ordering that they each pay their own legal costs.
All the uncertainty, acrimony, delay and legal expense of a case like that can be avoided simply and easily.
How? The remedy.
Before you sign any sale agreement, and before you decide in whose name/s you are going to buy the property –
- Take advice on whether to hold the property in one name, both names jointly, or in another legal entity altogether
- If you are going to own the property jointly, have an agreement drawn up to cover all possible contingencies, such as –
- Will you hold equal 50/50 undivided shares in the property, or will you apply some other ratio?
- Who will pay for what? Cover all possible costs –
i. The purchase price
ii. Bond instalments
iii. Rates, repairs, maintenance, other running expenses, etc
iv. Any other costs?
- c. What happens if you divorce or part company? Will you jointly sell the property and split the net proceeds? Can one of you sell his/her share and if so how is the other protected from landing up with a stranger as co-owner? Will you each have first right to buy out the other’s share, and if so at what price?
- d. What happens if one of you dies?
- e. How will you resolve any disputes over cost contributions, whether or not to sell, whether to raise a second bond, etc?
Our courts are called upon daily to resolve disputes over property ownership. Disputes which should have been avoided by obtaining legal assistance before signing any sale agreement.
© DotNews, 2005-2013. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.