A Guide to Removing Your Ex from the Title Deed and Mortgage in South Africa
Navigating the complexities of property ownership during a divorce can be challenging. One useful tool in South Africa is the Section 45 bis endorsement, which applies in divorce cases, the division of a joint estate, or changes in the marital property system. This endorsement, implemented by the Deeds Office, allows the registrar to note on the title deed that one spouse has acquired the other spouse’s share in the property or bond. This enables the acquiring spouse to manage the property as if they had taken formal transfer or cession into their name.
Understanding these endorsements helps property owners and buyers make informed decisions and avoid potential legal issues.
Mortgage Bond Considerations
If the property is under a registered mortgage bond, the endorsement can only be made if:
- The bond is cancelled,
- The property is released from the bond, or
- One or both spouses assume liability for the debt.
Case Study: Kate and Tom
Kate and Tom were married out of a community of property with accrual in South Africa. They purchased a home together during their marriage, securing a mortgage bond in both their names. After 10 years of marriage, they decided to divorce. Kate wishes to retain the property and continue with the mortgage payments, while Tom wants to be released from the mortgage bond to buy a condo in the city.
Steps to Resolve the Property Issue
- Filing for Divorce: Kate and Tom file for divorce, agreeing on most terms except for the property. They consult their respective attorneys to negotiate the terms of the property settlement.
- Property Valuation: An independent property valuer assesses the current market value of the home, and the outstanding mortgage balance is determined.
- Negotiation: Kate expresses her desire to retain the property and continue with the mortgage payments solely. Tom agrees, provided he is released from the mortgage bond and compensated for his share of the property’s equity.
- Bank Approval: Kate approaches the bank to discuss the possibility of releasing Tom from the mortgage bond. The bank requires Kate to prove her financial capability to service the mortgage independently. Kate provides proof of income, credit history, and other financial documents.
- Settlement Agreement: The attorneys draft a settlement agreement outlining the terms of the property transfer and mortgage bond release. The bank reviews the settlement agreement and Kate’s financial documents. Upon approval, the bank releases Tom from the mortgage bond, and Kate becomes the sole borrower/debtor.
- Title Transfer: The property title is transferred to Kate’s name, and the mortgage bond is endorsed to indicate that Tom is released from the bond at the Deeds Office.
Legal Framework
This solution is governed by Sections 45 and 57 of the Deeds Registries Act, of 1937, which allows for the substitution of debtors under a mortgage bond in South Africa. This provision permits the transfer of joint debtors’ obligations to the remaining owner of the entire property, which is hypothecated under a registered mortgage bond, subject to written consent from the bondholder (usually the bank) and the transferee.
Once the substitution is registered, the original debtor is released from all obligations under the bond, and the remaining owner assumes these responsibilities.
By following these steps and understanding the legal framework, individuals can navigate the complexities of property ownership during a divorce more effectively.
Navigating the intersection of divorce and property law requires specialised expertise. At A de Bruyn Attorneys, we combine our extensive knowledge in both divorce law and property law to provide comprehensive legal guidance.
Contact us today to leverage our dual expertise and secure the best asset solution for both parties. Let our experienced team support you through this complex process, ensuring your interests are protected and a fair resolution is achieved.