Author: Jaco Rademeyer
Owner and Principal of jaco Rademeyer Estate [JRE] Port Elizabeth
29 June 2020
Property co-ownership / What happens when your partner dies?
A Property24 Reader asks: “My husband has died. We own our property 50/50, I am sole beneficiary. We are married out of community of property. I understand that property needs to be transferred to myself as sole owner. The cost involved, the attorney maintains, is based on the market value of the 50% share of the property.
“Is this in fact correct as it seems a bit skewed given the fees are probably worked on the value of the property. Surely it should be at the same value as on the original deed of title seeing I am his spouse and heir. Is the fee structure something that can be validated by law or am I at the mercy of my attorney’s fee structure?”
Co-ownership is often utilised as a strategy to enter the property arena. Whether between friends, family or spouses it is an effective means of spreading the financial risk. As would be expected, co-ownership is not as simple as sole ownership and it is therefore recommended for prospective buyers to always consider entering into a co-ownership agreement to regulate the details of their co-ownership.
In a scenario where immovable property is co-owned by spouses married out of community of property and one of the spouse’s subsequently passes away (the “deceased spouse”), a co-ownership agreement would normally regulate such a situation. However, in its absence, the Will of the deceased will determine the outcome. Should the deceased have died intestate (without a Will), the rules regarding Instate Succession would be applicable.
In this instance where the marriage is out of community of property and the surviving spouse is the sole beneficiary of the deceased’s Will, the appointed executor of the deceased estate is required to effect transfer of the share in the immovable property in terms of the Will. Take further note that the transfer may only be registered once the liquidation and distribution account has been approved by the Master and has laid for inspection by the general public.
Furthermore, the conveyancer attending to the transfer would also need to certify that the transfer is in terms of the liquidation and distribution account in terms of section 42(1) of the Administration of Estates Act 66 of 1965 as amended… read here:
Exempted from transfer duty but not fees’
Importantly, certain transactions are specifically exempted from transfer duty which in this case includes surviving spouses acquiring the ownership of immovable property. However, the same cannot be said regarding attorney’s fees (transfer fees). Additionally, there will also be disbursements payable to the attorney attending to the transfer such as the deeds office fee. The deceased estate would cover all the costs above, but in certain circumstances the surviving spouse might have to cover such fees where there are no funds available in the estate. The deceased estate would also cover the cost of obtaining rates and levy clearance certificates.
Since transfer fees are still payable in a transaction such as the above, the fees would thus need to be calculated. In this regard it would be required to have the property valued where SARS specifically requires two valuations (the higher valuation taking preference). Transfer fees would accordingly be calculated based on this valuation amount rather than the value as per the title deed. Transfer fees are thus validated and standardised in terms of the law. view table of SARS Transfer Duty here:
As an example, should an immovable property be valued at R 1 500 000.00, the transfer fees payable no matter the attorneys practice would amount to R 23 480.
The original article can be viewed here: