In the name of love

EVEN though statistics reveal that more and more unmarried couples are buying property together, few of them are aware of the legalities around it.

“The law does not regard partners that live together as spouses. Therefore, it is best to register the property in both partners’ names to prove ownership, should the couple decide to separate one day,” says Adrian Goslett, the CEO of RE/MAX of Southern Africa.

It will also make it easier for the couple to divide their assets and to claim compensation from one another as partner X can buy partner Y out for example, and transfer the once jointly owned property into his name after termination of the relationship.

But what if partner X does not earn the same income as partner Y and therefore cannot contribute the same amount on the monthly mortgage payment of their home?

“Then the couple should ensure the bond is registered according to the financial contribution each partner will make. A bond can be registered 50:50, 70:30 or even 80:20. Your estate agent, bond originator or conveyancing attorney will be able to advise you on this,” notes Goslett.

He adds however, that in the case of property that’s jointly owned, banks usually hold both parties liable for the full amount outstanding, should monthly instalments fall behind. “Find out what the bank’s policy is with regards to home loan accounts that are in arrears before you commit to buying property together as you cannot predict what the future will hold.”

This is where a cohabitation agreement comes in handy. To summarise, a cohabitation agreement is an agreement in which both parties stipulate how all property and assets will be divided upon termination of the relationship among others.

“Seeing that this agreement is recognised by South African law, I strongly suggest that all couples who intend to live and or buy property together get a family lawyer to draw one up before they move in.”

Goslett adds that a cohabitation agreement should be regarded as the absolute minimum contract to have in place and that it should preferably be signed and sealed while both parties are still happy together “as they will more than likely be objective and fair in the decisions they’ll make”.

A good cohabitation agreement will distinguish between separately owned, jointly owned and commingled property while noting jointly approved living expenses and the division thereof, as well as each party’s contribution towards monthly loan expenses. It will also stipulate how the couple will deal with the transfer process of the jointly owned property, should one party want to retain the property at the time of the relationship coming to an end and or should they both decide to sell the property and divide the profit among themselves.

Aspects to discuss before investing in a home together include:

• Whether or not the property will be registered in both partners’ names.

• Who will draft your cohabitation agreement.

• How much each partner will contribute towards the down payment of the property.

• Who will be responsible for the rates and taxes, water and electricity, insurance, cleaning, gardening and the overall maintenance of the property inside and out, as well as the telephone bill and groceries.

• How you will go about when buying moveable property such as furniture.

• How moveable property will be divided, should the relationship come to an end or at the time of death.

• How you will handle cash flow issues like when partner Y needs to pay partner X back after he couldn’t contribute to the down payment of the property for a few months.

• What will be done with the jointly owned property when the relationship ends, at the time of death or should one partner become permanently disabled and cannot contribute financially anymore

Lastly, it is imperative that both partners note their intentions in their wills.