Cohabitation or co-ownership? - Everything Property

Cohabitation or co-ownership?


Buying property jointly or sharing a home with someone you know may seem like a clever way to stretch your rand, but make sure you aren’t left out in the cold when the partnership ends


Thousands are left with reduced or no income – and no alternative but to look for more affordable living arrangements. For some this could mean moving in with parents or siblings, while others may consider co-buying a property with a family member or friend. There are risks related to the legalities and responsibilities of both these options.

Sharing the same home

People sharing homes with romantic partners, friends or family is nothing new. South Africa’s high unemployment rate among young people coupled with rising rental costs, especially in urban areas, have many young people living with their parents, romantic partners, friends or colleagues while saving towards a place of their own.

However, the latest PayProp rental statistics indicate that since the start of the lockdown in March, there’s been a marked increase in the number of people who can’t afford to pay their rent in full and who will be needing more affordable accommodation.

Cohabitation can offer a solution, but there are risks involved. Property law specialist Shani van Niekerk, senior associate and attorney at Adams & Adams Attorneys, explains.

A contract is a must

Van Niekerk says it’s important to know there’s no such thing as a common law marriage or spouse. As such, it naturally follows that extended family members, friends or partners who cohabitate have no legal rights or responsibilities.

The consequence is that at the dissolution of the partnership or relationship or any cohabitation, parties are left vulnerable and without the legislative protection which, for example, married individuals have. Without a contract, there’s no legal obligation on any cohabitant to either maintain the other or pay for any specific expenses.

There’s no law that regulates the sharing of expenses where family members, partners or even friends cohabitate. In fact, only the individual who has entered into a lease agreement, or in whose name the bond or utilities bill is registered, will be held liable for payment regardless of who else enjoys the use thereof.

The only way to be protected under our law is to enter into a cohabitation agreement. Such an agreement is in the best interest of all parties and clarifies their expectations.

The cohabitation agreement

A cohabitation agreement regulates the rights and duties between cohabitants, Van Niekerk says. The agreement can provide for the division and distribution of assets if the cohabitation ends, and parties’ obligations and respective financial contributions towards the joint home.

A cohabitation agreement will be legally binding as long as it contains no provisions that are immoral or illegal. It is, however, important to note that a cohabitation agreement will not be enforceable concerning third parties.

A cohabitation agreement is the smart way to live together without fear of the future.


Buying a property together is not a decision to be taken lightly, says attorney Robert Krautkramer, director at Miltons Matsemela. What happens if one party loses their job and the other is responsible for the bond on their own? Or if one party wants to sell and the other doesn’t? How do you divide proceeds if one party contributed more to bond payments than the other?

Krautkramer says, according to the law, co-ownership is a type of partnership; people who own a property equally, share equally in the net profits.

It doesn’t mean they necessarily share in the overheads though, unless the title deed or a separate agreement says so. Nor does it mean that because one of them pays more over the course of ownership than the other that, upon sale, the one is entitled to more than the other.


What to do?

1  –  Always draw up a co-ownership agreement when buying together – even if you’re married. That will regulate the outcome should the property be sold. There’s no automatic entitlement at all to an “accounting” if, for example, each party did not contribute equally to the bonds due on the property.

2  –  Consider allocating shares in a property. Divide the shares equal to the percentage of the input by each party. For example, if two friends buy a property and one party contributed 40% of the start-up costs she has a 4/10th share and the other then has a 6/10th share as she contributed 60%. Then each party already owns according to their immediate input.

Considerations in such an agreement:

  • Who is responsible for the bond, rates and taxes, insurance, maintenance, improvements, etc?
  • What happens if you don’t uphold your end of the bargain and how does this affect your share ownership – regardless of what the title deed says?
  • At what point are you compelled to agree to sell?
  • What happens when one of you dies or loses your job or simply wants out?
  • Who do you appoint to sell and transfer the property?
  • How do you agree on a marketing and selling price?
  • What happens if one of you doesn’t adhere to the terms of the agreement?

Lastly, get an attorney with a strong litigation and property law background to draft the co-ownership agreement.

This protects you against the risk of having to go to the high court to have your partnership “liquidated” at huge expense and effort.

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