A reader has a half share in a property and he wants to know what can be done to convert this into a full ownership by the other owner.
There is no indication of the particular circumstances and reasons for the intended transaction but, as is often the case, it may relate to the couple breaking up or getting divorced.
There is also no information as to whether the other party is desirous of obtaining the other half share, although this could probably be inferred.
In respect of the mortgage bond registered over the property in favour of the bank, the reader asks whether the other owner would have to apply for a new bond should she wish to acquire his half share.
He also wants to know whether the other owner can merely obtain a bond for the purchase of his half share rather than cancelling the existing bond.
Furthermore, the reader asks what the situation will be should the other party not qualify for the intended bond.
See the reader’s question here.
As one person often doesn’t qualify singularly for a bond, parties acquiring ownership would normally apply jointly so their financial means appear more favourable to the bank.
In qualifying on a joint-basis, the bond is registered over the property with both purchasers being equally liable for the obligations established upon the registration of the bond.
It is unlikely a bank will be satisfied with an arrangement whereby the owner obtains another bond to purchase the half share without cancelling the existing arrangement.
More importantly, as the owner of a half share, the reader should be prudent in insisting on being released from his obligations in respect of the pre-existing bond over the property.
As he will no longer have ownership of the half share in question, he should not potentially be held liable in an instance where the other party defaults on payment of a monthly instalment.
As the reader intends the other person taking full ownership of the property, she will have to qualify for the bond on her own.
But as this appears to be a simple case of co-ownership of the property, one party could approach the court seeking an order for a partition.
This depends on any alternative arrangement the parties may be able to reach.
For example, the property could be rented out instead or be sold to a third party.
If this is not practical the court may make another order it deems fair and equitable in the circumstances.
For instance, it could order the one party to purchase the share of the other or for the property to be sold and the proceeds, subsequent to settlement of the bond, to be divided equally.
A workable solution reached between the parties will be preferable and will avoid potentially unnecessary legal costs.
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