Real Estate Investor Magazine South Africa May/June 2019 | Page 8

Q&A
Property Advice
PROPERTY
CO-OWNER
AGREEMENTS?
Jose Delgado, Director at Delgado Ve-
losa Kenworthy & Associates, answers
this week’s property question.
Question:
I have a joint property bond with a friend which we verbally agreed we will rent out. The process
went so well and she recommended the bond is deducted from my account and she will transfer her
share to me. She did one month’s payment, while I was doing the marketing for the place to find
tenants - when she said she wanted to get out of the deal. 
While still waiting and attending to the matter I managed to find tenants.  When she saw that she
no longer wanted to be out. For four months I was the one doing maintenance on the house. She
promised to settle the difference. It’s been over a year now and she is behind with her payments.
But I want separation but she doesn’t want to sell to me. I even found people to buy the house, but
she won’t budge.
Answer:
At the outset it is of paramount importance to plan and ensure
that the optimal structures are in place.
There are many options but in this case the parties opted for a
partnership, this is a simple default option but is fraught with
vagaries. In most cases the partnership is not regulated by a
partnership agreement that results in unfulfilled promises and
defaults on the verbally agreed obligations by either or both of
the parties.
In the case of the partnership the property is registered in the
name of both parties (generally equally but this has not been
confirmed in this case but we will assume the arrangement is
50/50).
Accordingly, the obligations of the parties are equal in that they
must equally contribute to any costs and the administration of
the property. Further the profit or loss on the property must be
borne equally between them. Further, there are administrative
issues that both must carry out pertaining to the property. E.g
who will manage the property? Who will handle the finances,
the books of account, payment of rates, taxes, levies, the bond, tax
returns financials etc.
All the issues raised above can be regulated in an agreement or
can be verbally agreed, the latter arrangement can be very difficult
to prove hence the importance of an agreement.
The crisp issue that our reader seeks advice on is how to remedy
his current dilemma.
The answers are many and varied.
The simple option is to demand that the other party perform
their obligations either verbally or in writing, if this fails then the
legal route must be followed.
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MAY/JUNE 2019 SA Real Estate Investor Magazine
He can attempt to sell the property BUT the partner may not be
amenable to this course of action and can block any attempts to
sell the property as they will have to agree and co-sign any sale
agreement, transfer and bond cancellation documents. This route
may come to nought.
Due to the value of the property, we assume the claims do not
exceed R20 000.00, further as the relief sought is against a natural
person, he can approach the Small Claims Court that can make
an order against the non-performing partner. The process is cost
effective as the reader can represent himself and does not require
an Attorney.
If the claims exceed R20 000.00, then he will need to approach
an Attorney who will represent him in claiming against the
defaulting partner for monies due and owing.
An alternate course of action may be for Chumile to instruct
the Attorney to dissolve the partnership. This will entail an
application to court and the appointment of a receiver to account
and deal with the property. This can be very costly and take an
inordinate amount of time to resolve.
The chilling reality is that the bank may take action against both
parties if he does not take action or does not continue to pay the
various costs associated with the property! A real bind.
Space constraints do not allow us to more fully expound on the
various aspects of the remedies listed above but it is evident that
one must plan and the correct structures or have the requisite
agreements in place.
If not and a dispute ensues, legal action is sure to follow to enforce
one’s rights.