DIVORCE ORDER READS THAT THE HOUSE IS YOURS, BUT IS IT REALLY?
Recent case law (Fischer v Ubomi Ushishi Trading CC and Others) again emphasized the importance of taking transfer by way of registration in the deeds office pursuant to a divorce order granting an ex-spouse’s half share in property to the other spouse where the parties were married in community of property to each other.
When a former spouse acquired the other spouse’s half share in the property by virtue of divorce order to that effect, he or she is granted a personal right to enforce registration of transfer of the property into his or her name. The divorce order itself however does not mean that you are the owner of the full property. The court order only grants you a right to insist on registration. Only once the half share in the property is registered in the relevant deeds office, will ownership vest in the spouse’s name entitled to the half share.
It is important to take note that even though you are entitled in terms of the personal right created by way of the divorce order to take transfer, this right is not enforceable against third parties (“the world at large”) as it is not regarded as a real right. A real right (ownership) only vests on date of registration and only then is it enforceable against third parties.
What this means in practical terms is that before registration of the half share into your name is effected, the risk remains that third parties (like your ex-spouse’s creditors) can lay claim to your ex-spouse’s half share in the property, which could have dire consequences for you.
It is therefore of the utmost importance to ensure that registration in fact takes place after the divorce order has been granted. In practice, after the court dissolves a marriage in community of property by way of court order incorporating a settlement agreement in terms of which one spouse waives their half-share in the property in favour of the other, the spouse entitled to the half share must apply to the relevant deeds office for an endorsement to that effect. It must also be noted that this application for endorsement (which is also an act of registration) is also a transfer which will attract transfer fees. It will therefore be advisable to make provision for said transfer fees well in advance to avoid unnecessary delays. Luckily, transfers by reason of divorce are exempt from transfer duty in terms of the Transfer Duty Act.
It will be prudent to speak to your attorney well in advance to make sure that you are familiar with all the ins and outs of the divorce and subsequent registration process.