Saint Valentine’s Day is approaching. It is as good a time as any to discuss the topic of purchasing property jointly as spouses. A married spouse may choose to purchase property in her or his individual name only. The property then belongs to the spouse whose name is on the title deed. That spouse can mortgage, sell, or otherwise deal with the property without requiring the consent of the other spouse.
Alternatively, the couple may choose to purchase property jointly and decide to own an undivided half share each (50%) or any other percentage share that the spouses consider appropriate. The property then belongs to both spouses at the level of percentage share indicated in the title deed. If the property is sold the net proceeds are payable to the spouses in accordance with their shares.
ADVANTAGES OF PURCHASING JOINTLY
There are advantages to purchasing property jointly as opposed to buying property in the name of one spouse. Some examples are:
- Property that is jointly owned is not capable of being mortgaged or transferred without the consent of both spouses; therefore there is greater security for the spouses during the subsistence of the marriage.
- In the event of death of one spouse or divorce it will be easier to establish a claim to the property as both spouses are identified as co-owners on the title deed.
- A spouse can bequeath her/his share in the property to anybody by executing a Will.
- When purchasing property jointly the couple may be able to obtain a higher level of Mortgage finance based on their combined income than they otherwise would on a single spouse’s income.
When the intention is to buy property together as spouses; there are some practical considerations to take note of during the negotiation for the purchase of the property and its subsequent conveyance.
- Where the property is being purchased through a workplace scheme or co-operative scheme of which only one of the spouses is a member, if the intention of the spouses is to own the property jointly as co-owners; then the intention to own property jointly should be communicated at an early stage in the negotiations and details of both spouses indicated on the agreement of sale. The omission of one spouse may result in additional costs as a subsequent transfer to the omitted spouse may have to be done.
- There are instances where spouses wrongly assume that entering the other spouse’s details as next of kin on scheme documents or having that spouse sign the agreement of sale as a witness is sufficient to confer real rights. Joint ownership requires both spouses’ names to be reflected in the title deed as joint owners. Without that, the spouse whose name is not included in the deed of transfer does not have real rights.
- Marriage in Zimbabwe is “out of community of property” and the legal consequence of this is that if the title deed cites the name of one spouse only, that spouse is at liberty to sell or mortgage the property without reference to the other spouse.
- If one spouse had received transfer of property which is only in the name of that one spouse and they wish to donate a share to the other spouse during their lifetime; then a deed of donation and subsequent transfer will be necessary1.
Honey & Blanckenberg is able to assist with drafting agreements of sale or deeds of donation as well as transfer of property and registration of mortgage bonds. You may contact us for further information. It will be a pleasure to be of service to you!
Harare, 13 February 2020
Nana AS Manu-Mabiza
All rights reserved
1 In cases of donations between spouses or former spouses of their Principal Private Residence, they could be entitled to exemptions of payment of Capital Gains Tax in terms Section 16 of the Capital Gains Act [Chapter 23:01]. However, we would need to advise on a case by case basis whether the exemption applies.