Author: Abrahams & Gross
Conveyancing and property law, family divorce and matrimonial law
26 February 2021
Transfer of immovable property following divorce
In respect of immovable property, it is important to note that the divorce order merely records that the party/parties are entitled to a full or half share in the immovable property. Thereafter, transfer of the applicable share in terms of the divorce order, must be registered by a conveyancer in the office of the Registrar of Deeds.
How is immovable property dealt with in a divorce?
An uncontested divorce will result in a consent paper being drawn up, signed by both parties, and the aforesaid document becoming an order of court. Furthermore, if the divorce is contested, a magistrate or judge will make the final decision as to how, in accordance with the marital property regime and their antenuptial contract (if applicable), the parties’ estate will be dissolved. Whether or not a divorce is contested, spouses will have to abide by the divorce order and the immovable property will be dissolved accordingly.
Co-operation is required from both parties in order to effect transfer. If one party refuses to comply, the other party may bring an application to court compelling the counterpart to adhere to the divorce order.
If a spouse is awarded the immovable property registered in the counterpart’s name, the spouse’s interest in the property is protected by his or her personal right acquired by the divorce order. The counterpart cannot sell the property and the property is protected from creditors until the deed of transfer is effected.
Spouses married in community of property, and spouses married out of community of property (with or without the accrual system)
In both instances transfer of immovable property per a divorce order will take place by endorsement in accordance with S45 of the Deeds Registries Act. The spouse who received a full share of the property will make an application to the Registrar of Deeds to endorse the current title deed, displaying only him or her as being the owner. If the divorce order stipulates the immovable property is to be divided in equal shares, both parties will make an application to the Registrar of Deeds, who will award both parties undivided shares in the immovable property.
In the event that parties are married out of community of property and the divorce order is silent on the immovable property, the spouse who has ownership will retain his/her ownership.
If there is a bond on the immovable property, the bond will also be endorsed to reflect the substitution of the debtor under the bond. If the person taking transfer cannot afford the bond, the property will be sold and profits will be awarded to the said spouse.
Transfer Duty – payable or parties exempted?
No transfer duty will be payable for the acquisition of the property as per S9(1)(k) of the Transfer Duty Act, if such property had been acquired by the other spouse prior to the date of contraction of the marriage.
Furthermore, in terms of S9(1)(i) of the Transfer Duty Act, no transfer duty will be payable for the acquisition of the property as per a divorced spouse who acquires the sole ownership in the whole or any portion of property registered in the name of his or her divorced spouse where that property or portion is transferred to that divorced spouse as a result of the dissolution of their marriage or union.
If the divorce order requires parties to sell the property, the purchaser will pay transfer duty of the immovable property and the proceeds will be distributed according to the divorce order.
Therefore, it is important to note that if parties reach their own settlement in respect of the immovable property, which is not made an order of court, the purchaser will be liable to pay transfer duty.
Who will pay transfer costs if the immovable property is disposed of per the divorce order?
Although parties are exempt from paying transfer duty if transfer is ordered per the divorce order, parties are still liable to pay transfer costs.
The party who will take transfer of the property or the party purchasing the property due to the property being sold per the divorce order, will be liable to pay conveyancer fees, administration fees, bond registration fees (if applicable), transfer duty (if applicable), deeds office fees, postage and petties, certificate from the homeowners association and/or body corporate levies, and disbursements.
The party who will be disposing of the property will be liable to pay rates and taxes, levies, estate agent commission (if applicable), cancellation costs (if applicable) and costs due in obtaining all the required compliance certificates.
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