This week the Property Poser expert considers a problem relating to co-ownership of a property over which a usufruct has been created.
A reader explains that the usufruct was created in favour of her elderly stepmother – the usufructuary – with her and her brother as bare dominium holders.
During the lifetime of the stepmother, the brother moved to the United Kingdom and the reader, with the consent of the usufructuary, moved onto the property along with her stepmother.
This sibling also paid for the maintenance and other expenses relating to the property until the death of the usufructuary.
This is when some of the problems that the reader experienced began to surface. The co-owner who moved to the UK wished to sell his interest in the property and the local owner duly made an offer to purchase his share.
This was not accepted, but he chose to sell his share to another person, for less than what the reader offered.
The reader now wants to know whether there is an obligation on her, as resident co-owner, to enter into a rental agreement with the new owner of the other half of the property.
She says there are also disputes about contributions towards expenses related to maintenance as well as rates and water consumption.
This issue is clearly not about a usufruct per se, but rather about the problems that can arise out of co-ownership of a property, especially if it is not regulated by an agreement, says Sean Radue of Radue Attorneys in Port Elizabeth.
“Firstly, it’s important to distinguish between the co-ownership and expenses that arise from this and the obligation of a tenant to carry any of these expenses, regardless of whether the tenant also happens to be one of the co-owners.”
If the co-owners own the property in equal shares, it means that they are equally responsible for property-related expenses, be they maintenance or running expenses, says Radue.
“In this instance, the tenant happens to own half of the property, but keep in mind that this is an undivided half share.”
He explains that it is not as simple as saying that the co-owner, for example, owns two of the four bedrooms.
“The tenant therefore needs to rent and pay for the half share that is not hers.”
Included in this rental agreement should be a provision stipulating who is responsible for the payment of water, electricity and rates, as between landlord and tenant, says Radue.
“The co-owner, who is also the tenant, will thus be responsible for some portion of the costs, in her capacity as co-owner, but may also be liable for certain costs in her capacity as tenant.”
He says the same goes for the other co-owner and, regardless of the rental agreement, he may still be liable for certain costs.
“He cannot, for example and as he is doing currently, claim that he is not responsible for costs in respect of water consumption because there is a tenant.”
In a situation where there already appears to be some animosity between the co-owners, the challenge is to reduce to writing the current terms of the agreement, says Radue.
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