How to Transfer Your Property After Divorce?
Key Takeaways:
Post-divorce property transfer demands legal and procedural considerations.
Steps include valuation, agreement drafting, and court approval.
Professional guidance from a conveyancer ensures a smooth transfer, navigating complexities and safeguarding interests.
Divorce is an emotional and difficult time for all parties concerned. And having to deal with the consequences of immovable property and the disposal of assets in particular can be both far reaching (more so than the parties initially anticipated) but also complicated.
It is always prudent to obtain the assistance of suitably qualified conveyancers who will be able to support your divorce lawyers and guide you through the process to ensure that you proceed on the correct basis and therefore prevent wasted efforts, unnecessary disputes and undue delays.
“Love and marriage go together like a horse and carriage.”
Frank Sinatra sang about many things. Old Blue Eyes. Just about everyone walking around today knows at least one line of one of his many songs. They have been redone and recorded by so many other artists over the years. You may not know the original. But you do know a lyric or two.
For me, the song “Love and Marriage” (written by Sammy Cahn with music by Jimmy Van Heusen) sung by Sinatra has always been synonymous with the 90’s sitcom Married… with Children, specifically the following lines –
“Try, try, try to separate them
It’s an illusion
Try, try, try, and you will only come
To this conclusion...”
Neither Al nor Peggy ever looked too happy about their marital situation. Always like they would rather be anywhere else. And with friend’s parents getting divorced whilst the show ran, I started to wonder a little about this institution of love and marriage….
It took a while for me to understand that the song was being kind of sarcastic. It seems like the song was really trying to say that sometimes love and marriage should be separated. Sometimes it’s just not meant to be.
Driven home even more so by the following on Songfacts –
“...love and marriage go together like a horse and carriage does not sound so impressive in 21st Century America…. it sounds even less impressive when you realize that a horse is backed blindly onto a carriage and spends its working life pulling a heavy load only to be rewarded with a bag of oats a day and an occasional crack of a whip.”
Not a happy-go-lucky “Love conquers all” type of song really…
Love and marriage, it would appear, do not always end in happily ever after.
Unfortunately.
That’s depressing…..
So now what?
Unfortunately unhappy marriages often end in divorce.
And whilst this is traumatic enough, the very notion of divorce simply does not cover all the practicalities that come with the process itself. From the arduous serving and filling of papers to the protracted court room battles, to eventually arriving at a settlement - if only to put the whole traumatic ordeal behind you.
But, despite it being a rather gruesome (at least where the marriage is concerned) affair, the following quote, I believe, rings true –
“Divorce isn’t such a tragedy. A tragedy’s staying in an unhappy marriage, teaching your children the wrong things about love. Nobody ever died of divorce.”
And from that bombshell - from that place where you hit rock bottom - you often find your base, your foundation on which you rebuild your life (something J.K. Rowling said in her inspiring book, Very Good Lives: The Fringe Benefits of Failure and the Importance of Imagination).
It is to this end that we speak. The getting on with it bit.
Because there are things to be done at the end of a divorce, not including time to mourn the end of a marriage (which you are completely entitled to and should do).
You need to act and in order to do so, you need to be armed with information on what that all means.
What should you know upon finalization of your divorce
There are different scenarios that need to be considered here.
Firstly, in an uncontested divorce (meaning the couple reached an agreement on all issues, including the division of their assets, liabilities, arrangements regarding minor children and the payment of maintenance) a settlement agreement is drawn up, signed by both parties, and thereafter made an order of court. This settlement agreement will form part of the divorce order.
A relatively easy(ier) process whereby everyone exits the marriage in the best way possible.
But if the divorce is contested (always acrimonious) and occurs when the couple are not able to agree on the division of their assets, and, when minor children are involved, who will be awarded primary custody and what amount of maintenance, if any, will be paid to the spouse and/or the children, a Judge will make the final decision as to how, in accordance with the marital property regime and their antenuptial contract (if applicable), the parties’ estate will be dissolved.
Read our article on ANC’s here.
Regardless of whether the divorce is contested or not, the now divorced spouses will have to abide by the divorce order. And remember just because the property is currently registered in one or both parties' names, it does not give them the right to sell and dispose of the property as they deem fit.
The divorce order will set out what the legal position is and how the property (whether it is the family home, vacation home or other property in question, must be dealt will be dealt with.
Important to note – it will take co-operation from both parties in order to effect transfer of the assets. If one party refuses to comply, the other party may bring an application to court compelling the other party to adhere to the divorce order.
And that seems unnecessary.
Keep in mind!
Now that you have the divorce order (which records that the party/parties are entitled to a full or half share in the immovable property) a conveyancer will need to be appointed. They will attend to the transfer of the applicable shares in terms of immovable property as set out in the divorce order, which must then be registered in the office of the Registrar of Deeds.
The attorneys at Benaters, having vast experience in the field, would be happy to assist you with this process.
What are the practicalities (in a general sense)?
Barring Section 9(1) of the Divorce Act 70 of 1979 - where the court has a discretion when granting a divorce on the grounds of irretrievable breakdown of a marriage, to order that the patrimonial benefits of one party be forfeited in favour of the other - the nature of your matrimonial property regime will generally determine how your assets will be divided in the event of a divorce.
Section 9(1) of the Divorce Act?
Section (9) (1) of the Divorce Act allows the court to weigh up and take into account the circumstances of the marriage when making an order. The court may order that one party forfeits their patrimonial benefits to the other where it finds that one party will be unduly benefitted in relation to the other as a consequence of the marriage. Especially when there has been an irretrievable breakdown of the marriage. When deciding whether or not to grant a forfeiture order, the court will consider the duration of the marriage, the circumstances which gave rise to the break-down of the marriage, and any substantial misconduct on the part of either spouse if applicable to the circumstances.
What happens with immovable property in a Divorce Order?
Well, say the divorce is an acrimonious one (i.e. it is contested) and no settlement agreement was reached prior to the divorce proceedings, if one of the spouses is awarded the immovable property that was registered in the other party’s name, the spouse’s interest in that property is protected by his or her personal right acquired by the Divorce Order.
What does this mean?
The other party cannot sell the property and the property is protected from creditors until the deed of transfer is affected.
But what actually happens?
Immovable property can only be transferred from one person to another by virtue of registration of the transfer in the deeds office. The dissolution of a marriage after divorce does not automatically bring about the transfer of ownership of the property. It merely allows for the recipient spouse a claim to the transfer of the share of the previous spouse.
In order for the property to vest wholly in the recipient spouse, and depending on whether the marriage was in or out of community of property, a specific process must be followed to effect registration of the arrangement regarding the ownership of the property in the deeds office.
Upon registration, with a marriage in community of property, the Registrar will endorse the title deed to show that the previous spouse no longer holds an interest in the property and that the former’s rights to the property now vests with the recipient spouse, as though that spouse had taken formal transfer of the property from the previous spouse.
With a marriage out of community of property, the spouse who acquires the property will need to undergo a formal deeds office process and obtain a new title deed in his/her name.
We discuss this in more detail below -
Marriage in community of property
The transfer of immovable property will take place by endorsement in accordance with Section 45bis (1) (a) of the Deeds Registries Act 47 of 1937.
“45. (1) (1) If immovable property or a lease under any law relating to land settlement or a bond is registered in a deeds registry in the name of one of two spouses or in the name of both spouses who –
(a) were married in community of property but have been divorced, and the person in whose name such property, lease or bond is registered or where such property, lease or bond is registered in the name of both spouses, one of them has lawfully acquired the share of his former spouse in the property, lease or bond
In other words, upon dissolution of a marriage in community of property, the divorce order although binding on the parties, does not by itself vest ownership in the other spouse. It merely creates a personal right to enforce transfer. The vesting of ownership requires endorsement of transfer in the Deeds Registry.
Therefore the spouse who received a full share of the property will make an application to the Registrar of Deeds to endorse the current title deed, displaying only him or her as being the sole owner.
The Deeds Registries Act does not provide a time period within which the spouse acquiring the property is required to have the title deed endorsed to reflect the change in ownership. Until such time as the change in ownership has been endorsed by the Registrar of Deeds, the title deed will continue to reflect both the former owner and the spouse acquiring the property, despite the marriage having been dissolved by a divorce order.
Marriages Out of community of property
The adage of “what’s mine is mine” comes into play. Upon dissolution of the marriage, this usually remains so (keeping in mind the courts discretion in Section 9(1) of the Divorce Act during acrimonious proceedings). Should accrual be included, a claim comes into existence regarding a share of the accrual.
Remember - the accrual ensures that both spouses gain a fair share of the estate once the marriage comes to an end.
But when property comes into play - and should the spouses be joint owners of a property - the property may be awarded to one party in terms of the divorce order and formal transfer of the half share of the property must take place from one spouse to the other.
For this to take place a formal deeds office process has to be followed to ensure that the spouse who acquired the property is reflected as the now sole owner. Usually, the divorce order (and/or settlement agreement) will contain a clause stating which conveyancer must attend to the transfer.
Unlike endorsements in the case of a marriage in community of property, the process here can be compared to that of a sale of a property where ownership is transferred from a seller to a purchaser. An agreement of sale is the cause for the transfer of ownership from a seller to a purchaser. In the case of a divorce, the divorce order and settlement agreement is the cause for the transfer from your ex-spouse to yourself. Only a half share transfer has to be done as you already own the other half share of the property.
If, however, you decide that you no longer want the property and you would rather sell the property, this can be done by an amended agreement to the settlement agreement entered into between your ex-spouse and yourself.
But keep in mind that if the parties wish to amend a settlement agreement that has already been made an order of court, they will need to formally apply to court to now make the amended agreement an order of court. Also, this is only possible if you have not yet taken formal transfer of the property..
This amended agreement will state that you will be entitled to all proceeds of the sale and that you no longer wish to transfer the property into your own name. You will be entitled to all the proceeds because you were awarded the property in the settlement agreement (which was made an order of court), and you are only amending the agreement to the extent that you want to sell the property.
The agreement to amend the settlement will have to be lodged in the deeds office as a supporting document. Both you and your ex-spouse will have to sign the offer to purchase as well as all the transfer documents relating to the sale of the property because the title deed and the deeds office records will still reflect that you and your ex-spouse are the joint registered owners.
However, for property that is owned by only one party, especially prior to the commencement of the marriage, the divorce proceedings will not have any effect on the property ownership. Individually owned property will remain the property of that one spouse – what’s mine is mine. Remember?
Keeping in mind that any division of property will always be subject to the terms of the settlement agreement and will be at the discretion of the courts.
Is Transfer Duty payable?
In terms of Section 9(1) (i) of the Transfer Duty Act 40 of 1949, no transfer duty will be payable for the acquisition of the property of a divorced spouse who acquires sole ownership in the whole or any portion of property registered in the name of his or her divorced spouse (where that property or portion is transferred to that divorced spouse as a result of the dissolution of their marriage or union).
If the divorce order requires parties to sell the property, the purchaser will pay transfer duty of the immovable property and the proceeds will be distributed according to the divorce order.
Therefore, it is important to note that if parties reach their own settlement in respect of the immovable property, which is not made an order of court, the ex-spouse who purchases the property will be liable to pay transfer duty.
In summary
Transfer duty does not apply if a property is awarded to a spouse in terms of a divorce order. The exemption applies to all marital regimes and to civil unions. However, if the property is not awarded to a spouse in terms of a divorce order and the parties reach an agreement outside of the formal divorce proceedings, the spouse who acquires the property will be liable for transfer duty.
Ok. But who pays the transfer costs if the immovable property is disposed of per the divorce order?
Despite the parties being exempt from paying transfer duty, if transfer is ordered as per a divorce order, parties are still liable to pay transfer costs.
While the Divorce Order sets out (quite extensively), who is liable to pay the costs of transfer of the property, it is usually the party who acquires the property in a Divorce order who will be liable to pay all costs related to the transfer costs (if applicable) and costs due in obtaining all the required compliance certificates.
To find out a little more on all conveyancing fees, read our article here.
Divorce is an emotional and difficult time for all parties concerned. And having to deal with the consequences of immovable property and the disposal of assets in particular can be both far reaching (more so than the parties initially anticipated) but also complicated.
It is always prudent to obtain the assistance of suitably qualified conveyancers who will be able to support your divorce lawyers and guide you through the process to ensure that you proceed on the correct basis and therefore prevent wasted efforts, unnecessary disputes and undue delays.
At Benaters, we understand that this is a difficult (and frustrating) time! We are here for you!
We would like to end this article with the following quote –
“In college, I had a course in Latin, and one day the word ‘divorce’ came up. I always figured it came from some root that meant ‘divide.’ In truth, it comes from ‘divertere,’ which means ‘to divert.’ I believe that. All divorce does is divert you.”
Get in touch with us today to see how we can best support you.
Written by Alicia Koch on behalf of Benaters