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Thursday, April 1, 2010
Ownership issues

The marital property regime governing a marriage, determines who is required to sign legal agreements and documents in respect of a transfer of immovable property. It also determines certain legal liabilities.

In South Africa, you can either marry ‘in community of property’ or ‘out of community of property’— the latter requiring a so-called “antenuptial contract”.
This is a contract entered into by two people, prior to their marriage, and it stipulates the terms and conditions for the exclusion of community of property between them. For example, this will ensure that one person’s creditors cannot hold the other person liable for the repayment of a debt, such as a mortgage bond, or in the event of a business liquidation the person’s trading liabilities. Persons planning to marry should seriously consider these issues as they can provide valuable financial protection.
The antenuptial contract may also include almost any terms and conditions as long as they are not illegal, immoral or contrary to public policy. Most of these relate to the division of assets should the marriage be dissolved because of either death or divorce. During the marriage each spouse will retain his or her separate property and would have complete freedom to deal with such property as he or she chooses. This would not be the case if the parties were married without an Antenuptial Contract, that is, ‘in community of property’.
Comments Carla Martin Senior Associate, Garlicke & Bousfield Inc, “Where parties are married with an antenuptial contract and deal with immovable property registered in the name of one spouse only, then the consent of the other spouse is therefore not required, since the estates of the spouses are separate.
“But where parties are married in community of property, a joint estate exists and any immovable property owned or acquired by the parties would form part of the joint estate.”
She says the Matrimonial Property Act provides that a spouse married in community of property may not perform certain acts without the consent of the other spouse. This includes entering into a contract to purchase or sell or mortgage immovable property, in which case neither spouse would be able to act without the written consent of the other.
“Practically this means that when selling, purchasing or mortgaging immovable property, both spouses will have to party to the contract of sale and both will be required to sign the transfer documents. The property and the bond, if a bond is required, will be registered in the name of both spouses.”
It is also of interest to note that ‘customary marriages’, whenever entered into, are now deemed to be in community of property (unless the parties have entered into an antenuptial contract prior to such marriage).
When parties who were married in community of property obtain a divorce the order of divorce or any agreement between the parties should record what is to happen to any immovable property they own. Martins comments that if the property is awarded to one of the spouses, it is recommended that the procedures laid down in terms of the Deeds Registries Act to award the property to this spouse should be complied with soon after the divorce is finalised. “If this is not done at the time, then years down the line when the divorced spouse wishes, perhaps, to sell and transfer the property, he or she could encounter problems or delays if the other spouse cannot be located or is deceased or for any other reason will not sign the documents required for transfer.”

Copyright © Insurance Times and Investments® Vol:23.4 1st April, 2010
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