Buying Property Together in South Africa: What Should You Decide Before You Sign?

Buying a property with another person can make home ownership more accessible, but it also means making an important financial commitment together.
Whether you are purchasing with a spouse, partner, family member or friend, it is worth deciding how the property will be owned and how you will deal with the financial and practical responsibilities before signing the Offer to Purchase.

Who will legally own the property?

When two or more people purchase property together, their ownership can be registered in the Deeds Registry.
South African deeds legislation expressly recognises joint ownership and undivided shares in land.
This means that two purchasers do not necessarily each own a physically separated portion of the property. Instead, each can hold an undivided share in the property.
The ownership arrangement should therefore be considered before the transaction is concluded.

Do the ownership shares have to be equal?

Co-ownership does not inherently mean that every owner must hold an equal share.
For example, purchasers may agree that ownership will be registered in different undivided shares, depending on the circumstances of the transaction.
Because the registered ownership has legal and financial consequences, the intended shares should be clearly established when the transaction is structured.

SARS also specifically recognises acquisitions of undivided shares in jointly owned property for transfer-duty purposes.

Why does your marital status matter?

If either purchaser is married, their matrimonial property regime can affect the legal and financial position.
For example, assets forming part of a marriage in community of property form part of the spouses’ joint estate. SARS likewise treats certain disposals of assets forming part of a joint estate as occurring in equal shares between the spouses.
It is therefore important that your conveyancer has accurate information about each purchaser’s marital status when preparing the transfer documentation.

What should you agree on before buying together?

The purchase price and ownership shares are only part of the picture.
Co-owners should also consider practical questions such as:

• Who will contribute to the deposit and purchase costs?
• How will monthly bond repayments be divided?
• Who will pay rates, levies, insurance and maintenance costs?
• How will decisions about major repairs or improvements be made?
• What happens if one owner wants to sell their share?
• What happens if one person can no longer afford their contribution?
• What happens if the relationship between the owners ends?
• How will a future sale of the property be dealt with?

Discussing these issues before purchasing is much easier than trying to resolve them after a disagreement has arisen.

Should you have a co-ownership agreement?

Where people are buying property together, particularly where they are not married to one another, a properly drafted co-ownership agreement can record how they intend to manage their relationship as property owners.
Depending on the circumstances, an agreement can deal with matters such as financial contributions, expenses, use of the property, improvements and what should happen if one person wants to leave the arrangement.
The appropriate terms will depend on the purchasers and the particular property, so the agreement should be tailored to the circumstances rather than treated as a generic document.

Be careful before signing the Offer to Purchase

An Offer to Purchase is not merely an indication that you are interested in buying a property.
South African law requires an agreement for the sale of land to be in writing and signed by the parties or their authorised agents for it to be valid.
Before signing, purchasers should therefore understand important provisions such as:

• the purchase price;
• how the purchase will be financed;
• any deposit required;
• suspensive conditions, including bond approval where applicable;
• occupation and occupational rent provisions;
• fixtures and fittings included in the sale; and
• any other conditions applying to the transaction.

If two people are purchasing together, the intended ownership arrangement should also be clear.

Does signing the Offer to Purchase mean you own the property?

No.
Signing a valid sale agreement creates contractual rights and obligations, but ownership of the property does not pass to the purchaser simply because the agreement has been signed.
The property must be transferred and registered in the Deeds Registry.
Government guidance confirms that the purchaser legally becomes the owner when the transfer is registered by the Registrar of Deeds.
We’ll cover that transfer process separately rather than duplicating it here.

Buying property together?

Buying property jointly can work very well, but the legal structure should reflect what the purchasers actually intend.
Getting advice before signing can help ensure that the Offer to Purchase, ownership structure and any co-ownership arrangements are appropriate for your circumstances.

DMF Attorneys assists clients with property transactions, conveyancing and related property-law matters.

Contact DMF Attorneys for advice before purchasing property together.