THE SIGNIFICANCE OF THE FAMILY HOME ON DIVORCE

When spouses divorce, the issue of the family home is generally a priority issue for settlement negotiations. This is in part due to the home often being the biggest asset owned by either or both spouses. In addition, there may be sentimental attachment to the home. In many cases, home is the place where the children have grown up, and where life memories have been made. This may in itself make it hard for the spouses to want to give it up, without a fight.

THE IMPACT OF THE MATRIMONIAL PROPERTY SYSTEM ON WHO GETS THE HOME ON DIVORCE

Ultimately, the issue of who gets the family home on divorce, is largely determined by the matrimonial property system that governs the spouses’ marriage. Nothing however prevents spouses from coming to their own agreement on how to settle the issue of who gets the family home on divorce. Critically, what is important is that the agreement reached herein, must be recorded in writing in a Divorce Settlement Agreement. Without this recordal, ex-spouses may later on find themselves at logger-heads, disputing the terms of their agreement. This dispute may even end up being more costly and time-consuming then their actual divorce process. Depending on what exactly has been agreed on, there is value to these provisions also being made part of the Divorce Order.

Where the spouses are married in community of property, the family home automatically forms part of their joint estate. Each spouse holds an undivided half share interest in the home. For marriages by way of Antenuptial Contract (ANC) with the application of the accrual system, the family home will need to be valued. The only exception hereto being where the home was specifically excluded in the ANC at the time of the marriage. The home’s value will need to be recorded under the accrual asset values. Monies owing on the bond will need to be recorded under the estate’s liabilities. With an ANC Marriage excluding the application of the accrual system, each spouse’s assets will remain their own. It will not be necessary to value the home in this situation, as on strict interpretation of the law, each spouse retains only those assets listed under their own name.

OPTIONS AVAILABLE TO SPOUSES ON WHO SHOULD GETS THE FAMILY HOME ON DIVORCE

SCENARIO ONE: JOINT OWNERSHIP OF THE HOME

Notwithstanding the matrimonial property system governing the marriage, spouses may elect that in those cases where the house is jointly owned by them, that:

• they want to continue as joint owners of the home after the divorce; or that
• one spouse should get the home and where applicable, that the spouse retaining the property pay out to the other, the value of that spouse’s half share interest in the home; or that
• the house be placed on the market for sale, with the proceeds of the sale later split between the spouses.

If with a community estate, the one spouse’s half share interest is to be given to the other spouse so that they retain the family home on divorce, all that needs to happen is that the Deeds office needs to reflect an endorsement in the title deeds to this effect. If the couple are however married by way of ANC and the one spouse wishes to take over the other spouse’s share in the property, their half share in the property would need to be formally transferred to the other spouse.

SCENARIO TWO: HOME IS OWNED BY THE ONE SPOUSE

In those cases where the house is owned by one spouse, the issue of who gets the family home on divorce may be agreed during the negotiations as follows:

• the registered owner keep the home ; or
• the registered owner sell the home ; or
• the registered owner keep the home, but allow the other spouse a right of occupation ; or
• the registered spouse transfer the home into the other spouse’s name.

No transfer need take place where the spouse who owns the property elects to retain the property. If that spouse decides to give the property to the other spouse, it will need to be formally transferred into that spouse’s name. Transfer duty will not apply to the transaction. The other costs associated with conveyancing will have to be paid.

KEY ISSUES FOR WHO GETS THE FAMILY HOME ON DIVORCE

There are a a number of factors that spouses need to be taken into account when deciding who gets the family home on divorce. These include:

THE REGISTERED OWNER OF THE PROPERTY

• Who is the registered owner of the property?
• Is there a bond registered over the property? With who?
• In whose name is the bond over the property?
• How much is owing on the bond?
• Can the other party afford to take over the bond if they want the home?
• How much is the bank’s bond cancellation and new registration costs?

GENERAL RUNNING COSTS OF THE HOME

• Who pays for the municipal utilities and other running costs of the home?
• How much are the monthly utility costs?
• What are the other general running costs of the home?
• What are the monthly upkeep costs over the property?
• Which spouse is better able to cover these costs?
• What urgent renovations are required for the home?
• Who should be responsible for the costs of the renovations?

THE SALE OF THE HOME ON DIVORCE

• If the home is to be sold, who will appoint the estate agent?
• What is the minimum sale price for the home?
• Is the one spouse in a position to buy out the other spouse’s interest in the home?
• Will the spouse who does the buy-out be able to afford the monthly utilities and running costs?

POST-DIVORCE JOINT OWNERSHIP OF THE HOME

• If the home is jointly owned post divorce, when is it envisaged that it will be sold?
• What factors will give rise to a requirement that the jointly owned home is immediately sold?

ONE SPOUSE HAVING A RIGHT OF OCCUPATION OF THE HOME ON DIVORCE

• If the one spouse who owns the home allows the other to remain in the home, what costs will they each cover?
• What is to happen if the occupying spouse can no longer afford these costs?
• What factors will give rise to a requirement that the home be immediately vacated?