Written for YourProperty

Regular readers of our Property Poser column may be aware that the impact of a marital regime on property ownership is often a burning question.

This is even more so, it appears, when creditors are laying claim to outstanding debts from either one or both of the joint owners.

One such reader writes that he and his wife are married out of community of property, with the exclusion of the accrual system. They are however the joint owners of the home in which they live.

Unfortunately, being pensioners, they have fallen on hard times and could no longer afford the bond repayments on the property. The house was consequently sold on auction.

The selling price realised was however insufficient to cover the outstanding bond amount together with the accrued interest and the auctioneer’s commission. The bank has insisted that the reader and his wife sign a document stating that they will jointly repay the outstanding amount still owing to the bank.

This concerns the reader as their marital regime dictates that any other assets are owned in their separate capacities. He thus feels that he and his wife should have signed these documents separately and be held individually accountable for any amount still owing to the bank.

In simple terms, a marriage out of community of property, excluding the accrual system, results in each person holding his or her own estate, says Rian du Toit from DTS Attorneys in Port Elizabeth.

“No provision is made for a sharing of assets or the growth in assets, as is the case where the accrual system is applicable.”

Du Toit says one major exception to this rule is found where assets are owned jointly – such as fixed property registered in both spouses’ names – and the couple has assumed joint and several liability for any related debt.

“Such an agreement will take precedence over the proprietary consequences of the marriage out of community of property.”

Therefore, the house is owned in undivided half shares by the couple, assuming there is no agreement to hold shares in different proportions, says Du Toit.

The standard type of mortgage loan agreement relating to a bond over immovable property specifically stipulates that co-owners are jointly and severally liable to the bank for the indebtedness, says Charlotte Vermaak from Chas Everitt in PE.

“This means that the bank can typically claim any outstanding monies from both owners, jointly or severally.”

Should one of the owners have sufficient assets in his or her own capacity to settle any outstanding claim, the bank could proceed against that person alone, says Vermaak, even if it means that the other party pays nothing due to a lack of further assets in his or her name.

“The owner who ends up paying more than his or her half of the outstanding amount has the right to take action for recovery of this ‘overpayment’ against the other co-owner.”

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