When Buying Property - Know The Marital Status Of The Seller

When Buying Property - Know The Marital Status Of The Seller

When buying a property, make sure that you establish the seller's marital status with something more than what the seller or estate agent tells you.

Your risk comes in if the seller is married in community of property. When couples in South Africa are married in community of property, the spouses' estates are combined, and they are deemed equal managers of the joint estate. They can therefor commit to any juristic act with regard to the joint estate without the consent of the other spouse - but, there are exceptions.

And one exception relates to immovable property.

Spouses who acquired property prior to the marriage, and subsequently gets married in community of property, who owns the Property? The new spouse automatically becomes a co-owner of the property, and no transfer is required.

During the marriage, spouses are always required to sign the Offer to Purchase, alternatively, a spouse needs the written consent of the other to sell, mortgage or burden the property (by granting a servitude over it for example). Without that written consent the transaction is void, unlawful and unenforceable.

Which is where the danger comes in. Consider this scenario - you pay for and take transfer of a property from a seller who you think is unmarried, but a spouse suddenly appears and says "I never consented to that sale so it's void. The transfer to you is cancelled so out you go and good luck getting your money back". What now?

Competing rights and a balancing act

There is of course a fine balancing act for courts involved here - on the one hand, the rights of the non-consenting spouse and on the other hand your rights as a good-faith buyer from a seller who you believed to be unmarried.

A recent Supreme Court of Appeal (SCA) judgment addressed exactly that situation.

"But I thought I was buying from an unmarried seller"

• A husband married in community of property sold and transferred a house to a buyer in 2009. At the time, his wife was not living in the house, having moved to another part of the country due to old age.
• When the seller passed away in 2013 his wife was appointed executrix of his deceased estate. Some four years later she successfully applied to the High Court for cancellation of the deed of transfer on the basis that the sale had been without her knowledge or consent.
• The buyer appealed to the SCA on the basis that the wife's consent to the sale should be "deemed" to have been given in that the relevant legislation provides for such deemed consent where a buyer "does not know and cannot reasonably know that the transaction is being entered into contrary to [the requirement for written consent]".
• He had, said the buyer, acted bona fide (in good faith) as he had not known of the marriage: "At the time I purchased the property from the deceased/seller, he was staying alone in the said property, and he also confirmed to me that he was not married. He signed the deed of sale and the transfer documents alone as unmarried."

What the buyer must prove

The buyer had to prove that he did not know, and could not reasonably have known, that consent was needed but lacking.

What the Court here needed to decide was whether the buyer should at the time of the sale have known of the marriage and the lack of written consent. "A duty is cast on a party seeking to rely on the deemed consent provision" held the Court "... to make the enquiries that a reasonable person would make in the circumstances as to whether the other contracting party is married, if so, in terms of which marriage regime, whether the consent of the non-contracting spouse is required and, if so, whether it has been given."

Finding that the buyer had indeed proved (1) that he did not know that the deceased was married and (2) that he could not reasonably have known this, the SCA allowed the appeal and the transfer to the buyer stands based on deemed consent by the spouse.

The facts of each case will be different, and it is important to bear in mind that in this matter the husband's claim to be unmarried was supported not only by the absence of any sign of a wife but also by two official documents - the deed of transfer and the power of attorney to pass transfer.

The bottom line is that as buyer you must make "reasonable enquiries" as to the seller's marital status and as to whether the other spouse's written consent to the sale is needed.