<MF LEGAL>
Recently, on our blog, we looked at transfer duty exemptions. One of these exemptions refers to the condition where a spouse, married in community of property, gets divorced and receives the joint property as part of the settlement.
REQUIREMENTS FOR A SECTION 45BIS(1)(A) (DEEDS REGISTRIES ACT) TRANSFER:
Recently, on our blog, we looked at transfer duty exemptions. One of these exemptions refers to the condition where a spouse, married in community of property, gets divorced and receives the joint property as part of the settlement.
REQUIREMENTS FOR A SECTION 45BIS(1)(A) (DEEDS REGISTRIES ACT) TRANSFER:
- Parties must be married in community of property
- One party must receive the entire property on divorce from the other spouse in terms of a court order
- Where the property is bonded, the acquiring party must qualify to carry the bond on their own (naturally this last requirement falls away where the house has been paid in full)
WHY SHOULD I KNOW ABOUT THIS?
This type of transfer (transfer by endorsement) is done in order to speed up the process of transfer of property between parties in the divorce process. The one spouse obtains full ownership of the house and the procedure should be financially feasible. Please note that an ordinary transfer in these instances may be done, however there are higher fees, as a normal transfer will attract transfer duty.
HOW DOES THE BANK VIEW THIS TYPE OF TRANSFER?
Be wary, this type of transfer can become problematic where there is still a bond over the property. In such an instance the bank may not allow the transfer as the spouse (acquiring) does not qualify to take full responsibility of a bond. In such an instance there may be no way to transfer by endorsement unless the bond is paid up and cancelled. Alternatively, the property will have to be sold by both parties to a third party and the spouse entitled to receive the property should receive the proceeds of sale.
In the event of death of one spouse:
Where however in the event of death - the surviving spouse does qualify for the bond the acquiring spouse will merely be substituted on the bond as the new mortgagor.