Written for YourProperty

A reader has asked the Property Poser panel for help in extracting himself from a property he jointly owns with his brother.

He writes that the situation is potentially tricky as the house is bonded and the mortgage bond is registered in both the reader and his brother’s names.

According to Sean Radue of Radue Attorneys in Port Elizabeth, there are two primary considerations for the reader to ponder.

“This first is the legal relationship between the two brothers regarding joint ownership of the property.”

The second is the reader’s position regarding the mortgage bond to which he is a party, says Radue.

“Joint ownership in a property means, in the absence of an agreement to the contrary, that each owner owns an undivided half share in the property.”

Radue says this refers to the fact that the actual portion of the property owned by one brother or the other cannot be identified or delineated.

“For the reader to extricate himself from the partnership, the brothers could agree to terminate the partnership with, ideally, certain agreed consequences.”

The reader does not mention whether he and his brother have a formal agreement regarding their conduct in relation to the property or what his ideal outcome would be, says Radue.

“The simplest solution would be for his brother to acquire full ownership.”

At this point, says Radue, the issue of the mortgage bond would become a consideration.

“It would either need to be settled or our reader’s brother could seek to take over the full bond obligation.”

Of course, the sibling would have to satisfy the requirements of the bank concerned and the National Credit Act, says Schalk van der Merwe from Rawson Properties in Somerset West, Cape Town.

“The dissolution of the partnership would not automatically release our reader from his bond obligations.”

If his brother does not wish to take over the ownership of the full property or is not in a position to qualify for the full bond, another solution would need to be found, says Van der Merwe.

“One solution would be to consider selling the property. This would probably, at least, settle the outstanding bond, thus releasing both brothers.”

Another possible solution would be for the reader to seek a purchaser of his half share of the property, says Van der Merwe.

“Again, he would need to be mindful of the potential complications the existing bond might present.”

Van der Merwe says a new party replacing the reader would want to consider the conclusion of a formal partnership agreement that deals with the practical aspects relating to joint ownership of the property.

He says the reader has also enquired about the costs involved in releasing him from the joint ownership.

“This would depend on what transpires that results in his release.

“If the property is sold with the help of an agent, commission may be payable to that agent. On top of that, the bond cancellation would also attract a fee.”

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