Women and property ownership

Women in the property market: From a joint bond to a single owner, is it possible?

The Constitution now clearly states that no one may be discriminated against on the basis of gender.  

Historically, South African women (especially those subject to customary laws) were considered minors who were dependent on either their husbands or fathers. With reference to the property market, this meant that they could not own immovable property independently, such as a house. The Constitution now clearly states that no one may be discriminated against on the basis of gender. Women may now legally and independently enter into sale transactions and own immovable property, however, most women may not necessarily be in a financial position to fully enjoy this right to own property.

Due to the costs of immovable property, one must often apply for a mortgage bond (“bond”) where one must undergo an affordability assessment to establish if the bond payments can be made. However, some may not always qualify for a bond and although it can happen to anyone, it often happens to single women within a certain income bracket (for example, a single mother heading a household). In these circumstances, it is not unheard of for a single woman to approach a relative or other trusted person in her life to assist with a joint bond application to assist her to meet the financial criteria for the bond. This arrangement may appear attractive, but there are legal implications to be aware of, such as that the other person will also be recognised as a joint owner of the property.

Some of the consequences of a joint bond are as follows:

>     If the woman struggles with bond repayments, the bond financier may also institute legal proceedings against the person with whom she jointly has the bond with. Both parties are responsible for the bond repayments.

>     Once the bond is paid up, both parties will be owners of the property and the title deed will be issued with the other person's names also appearing as a joint owner.

>     If the other person passes on, half of the property will be placed in the deceased estate and devolve upon that person's heirs/beneficiaries. This means that the woman may now find herself jointly owning the property with an unintended individual. Although it is possible for that other person to leave his/her share to the woman in his/her Will, one must remember that a person cannot be forced to include certain property in his/her Will.

>     The woman cannot leave the full property to her beneficiaries in a Will as she is only part owner, she can only deal with her share of the property in her Will.

These consequences of having a joint bond in these scenarios may not always be desirable. Before considering getting a joint bond, it may be advisable for the woman to rather explore options such as housing subsidies available for qualifying buyers. An example of a housing subsidy is the Finance Linked Individual Subsidy Programme (“FLISP”), which is a Government subsidy for first-time property buyers who falls inside a certain low-income bracket.

Can the other person be removed from the joint bond?

For a woman who already has a joint bond or who already paid up her bond and now wants to remove the other person from the issued title deed, all is not lost. There are steps she can follow to remove the person and become a single owner.

Removal of a person from a joint bond still being paid off.

This is permissible under section 57 of the Deeds Registries Act. The woman and the other person would have to agree that the other person is being removed from the bond. The bond financier will reassess the woman's financial capacity to establish whether she will meet the set requirements for the bond on her single income. If the woman qualifies, the other person can be removed and the records at the Deeds Office will also be endorsed to reflect this change. This is called “substitution of a debtor”.

Removal of a person from a title deed after the bond has been paid off completely.

A person may be removed from the title deed based on an agreement between the parties that the person will be removed or on the basis of a court order. The other person might demand compensation before their name can be removed from the title deed and it should be remembered that the person is legally recognised as an owner and would strictly speaking be entitled to that compensation (as if they were selling their share in the property to the woman). If that is the case, a sale agreement must be signed between the parties.

If the person agrees to be removed without compensation, an agreement must still be entered into between the parties to show that the other person agrees for their share to be transferred to the woman. The agreement is required by the deeds office to affect the transfer and remove the names of the other person from the title deed.

 If the other person refuses to be removed from the title deed and negotiations have failed between him/her and the woman, then the woman may approach the court for assistance. She would apply for an actio communi dividundo. The court has a wide discretion to make an order on how the property should be divided. In the case of Booysen v Stander (2018) 3 All SA 662 (WCC), the parties were unmarried and jointly owned immovable property. The woman approached the court for an actio communi dividundo and wanted full ownership of the property. She argued that she was the one paying the bond and she was only willing to pay the other person a small amount for them to be removed, an amount much less than half of the value of the property. The court made an order that the property must be transferred to the woman, but she had to pay the other person the full amount for their share in the property.

In conclusion, it is possible to move from a joint bond holder to a single owner. However, the process will result in attorney costs for the transfer to be affected into the woman's names. Furthermore, if the other person demands compensation, the woman may incur additional costs in paying the person as well since they are legally recognised as an owner. In the circumstances, the woman must consider all these risks before entering into a joint bond.

Statistics South Africa's General House Survey 2021 showed that 42.1% of households were headed by women. Meanwhile reports from the property market show that there has been an increase of single women buying properties over the years. However, single women accounted for less than 30% of property owners as of 2019.

Did you know…There are legal risks and liabilities that you need to consider when having a joint bond.