Question posted in the Divorce Law category relating to Gauteng
Hi,
If a couple has a joint mortgage and is now divorced, and neither party wants full ownership of the property, what are the options if the settlement value is less than the bond amount? Who is responsible for the shortfall and what are the payment options for this (can it be paid in installments or is a lump sum required)?
Also, if a couple was only married under Islamic Law 7 years ago in South Africa, is this now recognised as being married under community of property?
Thank you
For the first question*, the couple only had an Islamic marriage and is now divorced under Islamic law. The mortgage is in both parties names but contributions have not been equal to date, with one partner covering 70% of costs and the other 30%. The partner who contributed more does not want full ownership as they will be out of a job in a few months.
Message from the client
1) If a couple who is only married under Islamic law is now divorced, and has a joint mortgage and neither party wants full ownership, who is responsible for the shortfall if the property is being sold for less than the settlement value and is this loss shared equally regardless of how much each partner earns? Can this amount be paid in installments and who is best placed to advise on such a matter?
Message from the Lawyer
Hi there and thank you for your question,
I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.
Please keep in mind that our discussions is for general information purposes only. Our engagement on this website does not create an attorney-client relationship.
When you say the settlement value, I assume that you are referring to the price that you are able to sell the property for? Hence the shortfall in relation to the mortgage bond.
If the property is jointly owned by the parties, and the bond was a joint mortgage bond, then both of the parties are responsible for the shortfall on a 50-50 basis.
Can this amount be paid in installments and who is best placed to advise on such a matter? -- No, the bank will want full payment before it agrees to release the title deed to the purchaser of the property.
Message from the Lawyer
In relation to your question about the marriage regime, the Constitutional Court declared that Muslim marriages which have not yet been dissolved or are in the process of being dissolved at the date of the order (22 June 2022), may be dissolved in accordance with the Divorce Act as follows:
The entire Divorce Act will be applicable, except that all Muslim marriages must be treated as if they are out of community of property (unless any agreements exist to the contrary).
Message from the client
Thank you for responding to my question. So just to confirm they will be considered as being married out of community of property as they only had an Islamic marriage and have now separated?
If that is the case, and if one partner transfers full ownership of the property over to the other, what will the transfer cost be? I have read there is no transfer cost if the couple is married in community of property, but if it is out of community of property there could be transfer costs of up to R30k.
I also asked which type of lawyer is best placed to advise on such matters such as the joint mortgage now that the couple have separated, taking into account Islamic marriages and South African law?
Message from the Lawyer
In terms of Muslim law, the system of community of property is not recognised as the default principle, as it is in civil law. Instead, Muslim marriages are deemed to be marriages out of community of property, excluding the accrual system.
If you Google "Transfer Cost Calculator" you will find literally dozens of websites which can assist in calculating the exact transfer cost. All you need to do is to put in the value of the property.
Any divorce attorney can assist you with all aspects pertaining to the separation and divorce, and the assets, etc.