I had a case where I was acting for the man. His parents were struggling financially and during the course of the marriage they sold their house to my client at a reduced price.
Now the parties were experiencing matrimonial problems, and wanted to get divorced. My client’s wife had never made a bond payment on the property. She now insisted that she be paid half of the equity in the property. The property was registered in the name of both parties.
My client’s wife now claimed that the parties had an agreement that my client would pay the bond and that she would pay for the food, electricity, clothing accounts and medical aid. She had furthermore taken out a R50 000 loan to do renovations to the house, such as improvements to the bathroom.
Her argument was that she should be entitled to an equal share of the equity in the house (the value less the mortgage bond divided by two). Our argument was that the house, being purchased at a reduced price, was a premature inheritance received by our client from his parents.
A further issue in this matter was that in terms of the deeds office records, our client’s parents had a right to live on the property. So the logical way of settling this matter was that our client make some sort of offer to pay out his soon-to-be ex-wife.
At court the outcome of the case was that our client’s wife was only paid out the amount of the renovation money she had spent (R50 000) plus an extra R20 000 in respect of groceries and other expenses which she had incurred. The marriage had only been a four year marriage.
The court found that the husband had more of a financial interest in the property by virtue of his having purchased the house at a reduced price from his parents. The court also found it to be very important that the deeds records reflected my client’s parents as having a right to reside on the property.
In my opinion the court came to the correct decision. There has to be taken into account that my client had made every single bond payment and had bought the house at a reduced price. The R70 000 my client had to pay his wife was also a large amount, considering the poor state of the property market, and the difficulty in selling a fixed asset.
This article was written by Cape Town divorce lawyer, Peter M Baker
Marriage in community of property & loans