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Divorce and fixed asset conveyancing

 

Divorce matters and conveyancing of a fixed asset where there is a transfer of ownership of matrimonial assets, and also how the recession can affect the sale price.

Over the last few years South Africa has been in a recession and this has no doubt affected the number of divorces as well as the transfer of fixed assets.

The fixed asset is often the major asset in a divorce case and something must no doubt happen to it either before or after the divorce is finalized. The conveyancer is the attorney who attends to the registration of the house into the name of the new purchaser at the deeds office. This could be the registration into the name of a new third party or the registration which is passed from one spouse to the other in the case where one spouse takes over the share of the other spouse.

Not every attorney is a conveyancer. To qualify as a conveyancer an attorney needs to study and write a further exam. Normally one would qualify first as an attorney, and then after that write a conveyancing exam, should you be interested in property law. There have been instances where people have qualified as an attorney and conveyancer at the same time. A notary is an attorney who attends to the registration of antenuptial contracts amongst other things. Some attorneys qualify as an attorney, conveyancer and notary all at the same time.

Over the last few years the property market has slowed down largely due to the recession. The banks are not granting bonds as easily as they have been in the past. People are getting into more debt, which basically means that in a divorce situation where one party moves out of the matrimonial home and the expenses of the other party double, the house must be sold.

Very often in a divorce the man is the party paying the bond on the family home. In a situation for example where the man earns a salary of R30 000 gross per month and the lady R10 000 gross and the bond debit on the man’s salary is R10 000 per month, and the man moves out of the house and has to rent elsewhere and there are two children, the result would be that the house would need to be sold. The man in this situation cannot afford to pay maintenance for the children, the bond on the house and his rent elsewhere at the same time. Parties in this type of situation no doubt have to make a decision as to what is more important to them – the marriage and assets or their freedom and divorce. That is the harsh reality of the matter and some people consider their freedom to be more important to them.

Lately, in divorce situations, houses have been sold at a loss because of the recession. I had a client recently in a divorce who had moved to a different country and the wife had continued living in the matrimonial home after the divorce. The divorce order stated that the home had to be sold after the divorce. The man eventually was so desperate to sell the house that he sold it for R100 000 less than the amount owing on the bond. He was of the view that he would rather owe the bank R100 000 than R900 000. He just wanted out as he had a new well-paying job in a different country and a new girlfriend, and he wanted to make a clean break from his wife.

In some situations one spouse would rather retain the fixed asset as his or her sole and absolute property after the divorce. That spouse would then no doubt have to offer to pay the other spouse out for his or her share of the equity in the fixed asset. The conveyancer would then need to attend to the transfer of the one party’s share to the other party at the deeds office. The cost of that would depend on the fair market value of the property.

The first thing I request from my client is a fair market valuation on the property, that is if the parties own one. Both parties are entitled to their own valuation. In a situation where one party wants to buy the other party out, it is prudent first to establish whether the bank would release the other party from his or her obligations in terms of the bond. The banks I have noticed lately have become quite difficult and first require a divorce order and consent paper before they are able to say whether they will allow the one party to take over the full bond or not.

Conveyancing fees work according to a certain recommended guideline. For example the fee payable by the purchaser of a property over R350 000 up to and including R400 000 is R7 040, over R400 000 up to and including R450 000 is R7 590 and over R450 000 up to and including R500 000 is R8 250. It is important to remember that the purchaser of the property is the party who pays the conveyancing fees and not the seller.

Conveyancing is a very important part of divorce matters where there is fixed property. It is always best to use an attorney who specializes in divorce law to represent you in a divorce, but also one who knows how conveyancing works or who has an associate at the firm who knows about conveyancing.

article written by Cape Town divorce attorney, Peter M Baker

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