“While it may be uncomfortable or difficult to plan for the end when making a new beginning, considering every potential outcome upfront can save a lot of potential heartache and disagreement in the long term."
Careen McKinon, OOBA Provincial Sales Manager for Western Cape
As with any big commitment, this decision needs to be carefully planned and documented to avoid any trouble in home-owning paradise. Careen McKinon, Provincial Sales Manager for Western Cape, has the following advice for partners in property:
- Work out all the practicalities of the partnership and each partner’s commitment before making an offer. When the pressure is on and time is of the essence, this might cloud your judgment.
- Discuss all the various different scenarios of what might happen – from one partner getting married to someone else, to the unfortunate possibility of a death – and agree to the outcomes.
- Get a lawyer to draw up the contract between the two parties so that there is no doubt about what was agreed to in legal terms.
- Both parties must disclose any financial issues that could affect the partnership as they will both have to go through the same financial assessments as individual buyers.
- When the property is found, both parties should split the costs of purchase and maintenance equally. If this is not possible, then they must keep careful track of their individual expenses.
- It is a really good idea to get prequalified before house hunting. A prequalification service like ooba’s oobaqualified will give you an idea of your joint affordability and whether you have any financial issues on either of your credit records that need to be addressed before you buy a property.
Moving in together
- If you are moving in with a partner who already owns a property, you must create a contract to record the contributions to the property of the new partner.
- If the couple is starting to build a life together, the property should be registered in both names, so that both will own a share in the immovable property and neither will be at a financial disadvantage.
- The owner would have to sell half of the property to their partners at a fair market rate – with fees including transfer duty and the costs of cancelling the existing bond and registering the new bond in both parties’ names.
- In the case of married partners, if the couple divorces, the way that the property is shared will be governed by the type of marriage contract that they have.
- If they are married in community of property, then both parties are liable for the debts individually or together and will share equally in any gains.
- If they are married out of community of property, they will each own a share of the property, and will have to agree how to dispose of it.
“While it may be uncomfortable or difficult to plan for the end when making a new beginning, considering every potential outcome upfront can save a lot of potential heartache and disagreement in the long term,” says McKinon.
*Article credit: Ooba. Experts in home finance.