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How do I exit our joint bond?

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Q

Hi, my partner and I took out a joint bond and bought a place together for +-R400,000. We have been living together for about four years.

I am not sure about our relationship and I am considering moving out. I would like to know the following:

  1. I am considering moving out and letting her keep the place. Would it be wise in this day and age to sell my half to her? I ask this because I always read about the price of properties increasing and young people hardly being able to afford getting a house of their own. We both earn pretty average salaries and got a place on the Cape Flats.
  2. Also, if I sell my share, how do funds work for me? Do I get my full half portion? For example, R200,000 or would there be fees that need to be paid in the transfer?
  3. Could I put this on another bond?
  4. What are the other options? Selling and splitting the profits, renting? – Kim

A

Hi Kim, the solution will depend on the type of bond: direct or indemnity. Direct bonds allow endorsements, while indemnity bonds would need to be cancelled and re-registered.

The best solution would be for the bond holders to contact their financial institution, which would then conduct a full credit and affordability assessment to ascertain whether one of the bond holders may be released. Once they have completed their assessment they will either approve or decline the request.

My personal opinion is to try and release yourself if you are no longer together; anything could happen in the future and the longer the situation is left the more that can go wrong. One partner stops contributing, circumstances change etc. Rather put the money into another property, but you will need to apply for a new bond with new fees to register.

If both parties agree to sell and split any profits then that is also a simple solution. Renting out the property still brings up the same issues mentioned above. Who gets paid the rent? What happens if one party doesn’t pay their portion of the bond?

You will need to find out what the settlement is on the bond first before you know if there will be any balance due to you.


Got a burning question? Email mariette@hometimes.co.za and we’ll be sure to assist you


brad allenAnswered by Brad Allen, national sales manager at Only Realty

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ungerermariette@gmail.com

Mariette Steynberg is a qualified economist with a post-graduate diploma in financial planning. She has enjoyed working on holistic financial plans for clients in various stages of life, as well as a development economist assessing the socioeconomic impacts of new developments. When she is not working, Mariette enjoys parenting her quirky, delightful toddler girl. Cloth diapering, Eskimo kisses and the importance of reading to your child are all causes close to her heart. Mariette is passionate about financial education and hopes to use the experience she has gained to share knowledge with HomeTimes’ readership. Her goal is to provide information that is implementable by everyone.

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1 COMMENT
  • vc 15th November 2017

    If either party paid in extra lumpsums or made withdrawals from the access bond during the time, kindly let us know how to calculate who gets what when selling?

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