A reader’s ex-husband wants to give his share of a property they jointly own to their daughter and she wants to know how much it will cost to register the bond of about R26 000.
The property is valued at approximately R650 000 and R26 000 is the amount outstanding on the bond.
As an initial observation, it is unlikely that the half-share in the jointly-owned property can be transferred from the ex-husband into the name of their daughter.
See the reader’s question here.
A mortgage bond is typically granted and held over a fixed property as security for the payment of the instalments to a financial institution such as a bank.
One of the stipulations in respect of dealing with the property concerned is that it may not be sold or transferred from the owner to a third party without the bondholder’s consent.
Failing consent of the bondholder, the share in the property cannot be registered into the name of the reader’s daughter.
This states that no alienation of land under section 2(1) shall be of any effect unless it is contained in a deed of alienation signed by the relevant parties – including undivided half-shares.
If they want to transfer the ex-husband’s half-share to the daughter as well as the remaining debt, she will have to comply with the requirements of the legislation and finance institution in the event of a fresh mortgage bond being sought.
The financial institution the parties approach to secure a mortgage bond will advise them of the requirements.
Generally, these relate to the creditworthiness of and affordability by the person concerned in respect of the repayment of the amount borrowed.
The financial institution will also consider the value of the fixed property as it will form the basis of their security. In this instance, it would appear that the value of the property exceeds the amount sought.
The cost of registering a fresh bond should be considered against the cost of a substitution of debtor on a bond in accordance with section 57 of the Deeds Registries Act.
This section says that if the owner transfers the land to another person and has not reserved any real right in such land, the registrar may register the transfer and substitute the transferee for the transferor as debtor in respect of the bond.
This is provided he receives, in duplicate, the written consent of the holder of the bond and the transferee for the amount of the outstanding debt.
The current guideline provides for 75 per cent of the recommended fee as set out in the schedule to the guideline, therefore 75 per cent of the tariff applicable for a new bond registration.
It should be noted that, in the event of a section 57 substitution not being possible or permitted, the existing bond will have to be cancelled and a fresh one registered.
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