The transfer of immovable property after a divorce

 

When does one become the owner of a fixed property in terms of a divorce settlement agreement?

For example, the settlement agreement may provide that within seven days of the grant of a decree of divorce Mr Jones shall cause his half share of 123 -1st Ave, Orange Grove to be transferred to Mrs Jones.

The date of acquisition of the half share would be the date of the court order and not the date of the agreement between the parties regarding the transfer of the half share. Upon the granting of the order, Mrs Jones only acquires a personal right to compel transfer to her of Mr Jones’ half share.  This right protects her interest in the property against any subsequent claims against Mr Jones’ creditors until it is formally transferred by way of deed of transfer or endorsement into her name.

Section 16 of the Deeds Registries Act sets out how real rights (ownership) of land are transferred:

“Save as otherwise provided in this Act or in any other law the ownership of land may be conveyed from one person to another only by means of a deed of transfer executed or attested by the registrar, and other real rights in land may be conveyed from one person to another only by means of a deed of cession attested by a notary public and registered by the registrar…” 

Ownership in land requires an act of registration in the Deeds Office. There are exceptions to this general rule:  the acquisition of ownership through succession, prescription or of an interest in land by virtue of a marriage in community of property (e.g. if the husband owned property and subsequently married in community of property, his wife automatically becomes co-owner of that property and no act of registration is required in terms of the Deeds Registries Act).

It is also possible to amend the divorce order or settlement agreement by executing an addendum to such agreement. The courts have previously ruled that the consent of the court is not a prerequisite to amend the stipulations of the divorce order regarding the redistribution of assets. (Ex parte Boshi and Other 1979 (1) SA 249 and Ex parte Herman 1954(2) 636 (O) and Chief Registrars Circular 21 of 1990. 

In a case where settlement / addendum in relation to property is only reached after the formal court proceedings are finalised, the date of acquisition will be the date that the subsequent settlement is reached, provided that any exemption of transfer duty will only be afforded where the settlement agreement, entered into ex post facto the divorce, has been made an order of court per a recent ruling by SARS. 

DIVORCE MEDIATION AS AN ALTERNATIVE TO LITIGATION

Divorce mediation is an alternative dispute resolution process that Kansas couples may use to settle differences on specific issues in a divorce. Spouses may decide on their own to try mediation, or a judge can order mediation in a divorce case. Before you consider or begin mediation, you should have an understanding of how it works.

Editor: this is an American article that has significance in South Africa. Mediation in South African divorces is now compulsory.

Source:

By Sloan, Eisenbarth, Glassman, McEntire & Jarboe, LLC, KansasLaw Firm Website: https://www.sloanlawfirm.com/

Our discussion takes into account the provisions of the Kansas Family Law Code that govern mediation in domestic and family matters, as well as Rule 16.3 of the Kansas Supreme Court. The Court Rule designates mediation as the primary ADR process in Kansas litigation matters, addresses the process, and provides for Court approval of private mediators who meet certain requirements.

WHAT IS A MEDIATOR’S ROLE?

The statutory definition of mediation in the Kansas Family Law Code contains three important parts that explain the role of a divorce mediator. First, the law states that mediation is “the process by which a neutral mediator … assists the parties in reaching a mutually acceptable agreement as to issues of child custody, residency, visitation, parenting time, division of property or other issues.”

As the law states, a mediator is a neutral third party. While mediators often are lawyers, the mediator does not act as legal counsel for either spouse, nor does the mediator provide legal advice to the spouses during divorce mediation.

The definition goes on to state that the role of a mediator is to assist participants in “identifying the issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise and finding points of agreement.” By working with both spouses in an informal environment, the mediator helps them address their differences, establish priorities, and reach agreement when possible.

Finally, the definition section in the law states: “An agreement reached by the parties is to be based on the decisions of the parties and not the decisions of the mediator.” A mediator does not make decisions for the parties or force agreements on the spouses in a divorce mediation. Instead, the mediator explores both spouses’ viewpoints in an effort to identify areas of agreement. All points of agreement in a mediation are based on the spouses’ own decisions, not the mediator’s.

HOW DOES THE MEDIATION PROCESS WORK?

Mediation sessions occur in an informal and safe environment. Only the spouses attend the session. Even if a participant has legal counsel, the lawyer does not attend the session. Some mediation participants do have a lawyer, but not all do. The mediator will suggest to the parties that they consider consulting with an attorney, especially at the end of mediation, but legal representation in a domestic matter is a choice that each person makes.

All discussions during mediation are strictly confidential. Statements made by the spouses in mediation are protected by privilege, with a few necessary limitations, such as reporting threats of violence. Factual information given during mediation may be provided to a participant’s lawyer at the end of mediation if both parties agree to disclosure.

At the beginning of the mediation, the mediator explains the process to the participants. Discussions initially center around identifying the areas in which the participants have differences. After establishing the agenda, the mediator draws on professional skill and experience to encourage productive conversations between the participants, in which they navigate through the issues and negotiate mutually agreeable resolutions if possible.

During the process, the mediator makes certain that the participants fully consider the best interest of children and the consequences of any decision the participants reach relating to the children. The mediator may meet with children and other individuals, if the participants consent.

A mediator will end a mediation if the mediator concludes either that continuing the process will harm or prejudice a participant or affected children or that a participant’s lack of willingness to participate makes a reasonable agreement unlikely.

WHAT HAPPENS IF THE PARTICIPANTS REACH AN AGREEMENT ON ISSUES?

An agreement in divorce mediation is not binding on the participants or admissible in court unless it is put in writing, signed by both parties and their attorneys (if any), and approved by the court. At the end of mediation, the mediator provides a written summary of the understanding reached by the participants and will suggest that the participants seek legal counsel for assistance in reducing their mediation agreement to writing.

WHEN SHOULD SPOUSES CONSIDER DIVORCE MEDIATION?

Divorce mediation can be a valuable process, but it is not necessarily the best approach for all divorcing spouses. It may work well in circumstances where spouses are amicable and have some basic agreements but also outstanding differences to resolve.

Divorce mediation can also work in high conflict situations. Mediators have specific approaches and tools to use in resolving conflict between spouses, even when emotions run high. As a neutral outside party, the mediator works to reduce conflict without taking sides by facilitating discussion between the participants. The mediator provides support for both participants equally, while encouraging participants to focus on what course of action is best for them and their family.

Mediation is a flexible and adaptable format that spouses can use as a process for resolving outstanding issues without requiring involvement of a court or judge. As an alternative dispute resolution mechanism, it can save the expense and emotional strain of a protracted battle in court. If you think mediation may work in your divorce case, you should discuss the possibility with your lawyer or with a professional mediator. 

Civil Union Act amendment

On 20 October 2020, parliament repealed section 6 of the Civil Union Act that previously permitted a marriage officer to object to solemnise a civil union between persons of the same sex on the ground of conscience.

Thiruna Naidoo of the Centre for Human Rights stated that that the amendment was a positive step toward eliminating existing differentiation between marriages and civil union partnerships, reducing discrimination against same-sex relationships and achieving equality for same-sex couples in South Africa.

There are three laws in South Africa that provide for the status of marriage in South Africa. These are the Marriage Act (Act 25 of 1961)  which provides for civil or religious opposite-sex marriages; the Recognition of Customary Marriages Act (Act 120 of 1998), which provides for the civil registration of marriages solemnised according to the traditions of indigenous groups; and the Civil Union Act (Act 17 of 2006), which provides for same-sex civil marriages, religious marriages and civil partnerships. A person may only be married under one of these laws at any given time.

The Civil Union Act legalised same-sex marriage recognising that "Marriage is the union of two persons to the exclusion of all others for life."  It thus allows two people, regardless of gender, to form either a marriage or a civil partnership.

A civil union (also known as a civil partnership) is a legally recognized arrangement like marriage, that provides recognition in law for same-sex couples.

Same-sex parties wanting to get married must inform advise the marriage officer whether their civil union should be known as a marriage or a civil partnership and he or she will then solemnise the civil union as a marriage or civil union. The marriage officer then issues the parties with the registration certificate stating that they have ended into a marriage or civil partnership. The marriage officer will then submit the certificate to the Department of Home Affairs to include in the population register the particulars of the marriage or civil union.

If same-sex parties wish to enter into an antenuptial contract before they enter into a civil union, they can request the notary to reflect the proprietary consequences of their intended civil partnership (as opposed to a marriage) in the marriage contract.

Tax Deduction for Home Expenses under COVID-19

More and more employees are working from home under lockdown conditions. Some may even continue to work from home on an indefinite basis.

The Income Tax Act 58 of 1962 (the Act) allows employees to claim tax deductions for home office expenses that will typically include rent of premises, interest on bond, cost of repairs and other expenses relating to the home office, business calls, stationery, share of domestic cleaning fees, office equipment and wear-and-tear.

In terms of the Act, an employee can claim a tax deduction for home expenses if he or she works from home for at least six months of a tax year in a dedicated work area specifically equipped for work. In addition, the home office must "regularly and exclusively used" for such purposes. You won’t qualify if you work on the dining room table or meet clients in the dining room.

Most employees can’t afford to create a designated home office space. Under lockdown, this restriction is not fair especially because work from home employees will see an increase in their electricity, water, telephone and wi-fi bills.

Under lockdown and perhaps even thereafter the state should amend the strict requirements and allow tax deductions to employees that work from home even if they do not have a designated office space. This would be both an additional COVID-19 relief measure and would promote the principles of fairness and equality.

 

Can a bank sell a repossessed vehicle for a ridiculous amount?

 

FirstRand Bank Limited t/a Wesbank v Davel (1229/2018) [2019] ZASCA 168 (29 November 2019). 

FirstRand Bank Limited t/a Wesbank (Wesbank), concluded a written instalment sale agreement with Davel, in terms of which he purchased a 2010 Volkswagen Polo, payable over 59 months with a balloon payment in the 60^th month. Davel fell behind on the payment of his instalments. 

Wesbank sent him a notice in terms of s 129(1)(a) of the National Credit Act 34 of 2005 drawing his attention to the options available to him in terms of the Act, but also stating that, in the event of him not choosing any of them, legal action would be instituted against him claiming, inter alia, cancellation of the agreement and return of the vehicle. Mr Davel did not respond to the notice, prompting Wesbank to issue summons claiming the relief it had threatened. This was followed by an application for summary judgment by Wesbank, in terms of which it claimed, inter alia, the cancellation of the agreement, the return of the motor vehicle and that the entire damages component of its claim be postponed sine die. It also sought forfeiture of all monies paid by Mr Davel. 

The court had to decide what relief to grant. It had to balance the interests of the credit provider (Wesbank) and the credit receiver (Davel). the Credit Act provides protection for consumers and for the enforcement of the rights of credit providers - an "equality of arms". 

The court was concerned that there was a tendency to recover vehicles and then sell them at a ridiculous price. It ordered Wesbank (the plaintiff) to give Davel (the defendant) notice: 

a)    setting out the estimated value of the vehicle;

b)    informing the defendant that it intends to sell the returned vehicle as soon as practicable for the best price reasonably obtainable; and

c)    informing the defendant that the price obtained for the returned vehicle upon its sale may be higher or lower than the estimated value; 

Thereafter, the plaintiff had to sell the returned vehicle as soon as practicable for the best price reasonably obtainable. After selling the returned vehicle, the plaintiff was required to: 

a)    credit or debit the defendant with a payment or charge equivalent to the proceeds of the sale less any expenses reasonably incurred by the plaintiff in connection with the sale of the goods; and 

b)    give the defendant a written notice stating the following: 

                      i.        the settlement value of the agreement immediately before the sale;

                     ii.        the gross amount realised on the sale;

                    iii.        the net proceeds of the sale after deducting the plaintiff’s permitted default charges, if applicable, and reasonable costs allowed under paragraph (a); and

                    iv.        the amount credited or debited to the defendant’s account. 

The notice had to state that: 

a)    If the defendant disputes the amount of the proceeds of the sale or any other charges or expenses incurred, he or she may engage directly with the credit provider in relation thereto. 

b)    If the engagement referred to in (a) does not yield, from the defendant’s perspective, the desired result, he or she may, refer the dispute to the Tribunal or submit a complaint in terms of s 136 of Credit Act 34 of 2005 to the National Credit Regulator. 

If an amount falls to be credited to the defendant’s account which exceeds the settlement value immediately before the sale of the returned vehicle, the plaintiff must remit such excess amount to the defendant. 

If an amount is credited to the defendant’s account which is less than the settlement value before the sale, or an amount is debited to the defendant’s account, the plaintiff may demand payment from the defendant of the remaining settlement value. If the defendant fails to pay the amount demanded within 10 business days of receiving such demand, the plaintiff may commence proceedings against the defendant for any outstanding damages.