How customary marriage law affects property purchases
Customary law marriages remain popular in South Africa, and as with any legal transaction, this kind of marriage has its own implications, especially when purchasing a home.
What is a customary marriage?
In terms of SA law, customary marriages are recognised if they observe the traditions of indigenous African people. This law states that the marriage is between spouses above the age of 18 and that the marriage must be negotiated, entered into, or celebrated in accordance with the traditions and customs of the marrying parties.
How is Lobola factored in?
Part of these negotiations concerns ‘Lobola’, a dowry of sorts that the groom’s family presents to the bride’s as a token of appreciation, and is usually something of value, be that cash, cattle or other. These negotiations are between various family members and are helpful evidence that marriage negotiations have occurred. Many believe that Lobola is the foundation of the relationship between the two families. However, it is not necessarily a strict requirement in terms of the law, although some form of negotiation is required for the marriage to be recognised.
What is the marriage status?
Once Lobola and any other negotiations have been concluded, the couple is married under the Recognition of Customary Marriages Act (1998). It is considered married in the community of property unless otherwise stated in an ante-nuptial contract. “This means that assets and liabilities are shared equally,” says Hopewell Sathekge, director at STBB Attorneys. “Therefore, when the time comes to buy a home or split assets, there are several important factors that a couple married in community of property must consider.”
Purchase before or after negotiations?
“As with civil marriages, there is no right or wrong; it simply comes down to personal preference,” says Sathekge. “For some, owning a home before Lobola negotiations may be viewed as a sign of financial stability, underscoring their ability to provide for each other. For others, they may choose to purchase a home together once they have embarked on the journey of marriage.”
Either way, Gavin Lomberg, CEO of ooba Home Loans, believes that it is important to shed light on how being married in community of property can influence a home loan application and subsequent homeownership.
The marriage contract and relationship to a home loan
Lomberg explains that the marriage contract determines whether both spouses must consent to purchase a home and finance it via a home loan.
“In the case of a marriage in community of property, both parties are required to apply jointly for the home loan, regardless of whether they’re a first- or second-time homebuyer, and the home will be registered in both parties’ names,” he says.
With this in mind, Lomberg adds that it’s important that couples have a clear understanding of how being married in community of property directly impacts on their legal obligations and access to credit and loans.
“Without proper knowledge and planning, this legal arrangement may complicate decisions around property ownership, debt management, and long-term financial security,” he says. “Navigating this aspect of the marriage requires thoughtful consideration to ensure homeownership goals align, and this is where pre-approval of a home loan becomes vital.”
Pre-approved home loans crucial
For pre-approval to take place, both spouses’ affordability and credit ratings are assessed, which generally should be a score of 610+. “A pre-qualification certificate is issued after assessments, is valid for 90 days, and is necessary for home loan applications,” says Lombard.
Lomberg adds that a potential advantage of a joint home loan is the possibility of the couple being approved for a bigger home loan.
“In the case of a joint home loan, some applicants may be approved for a bigger one as both incomes are pooled together. They may also be more likely to receive bank approval as the debt obligations fall on two parties, providing the bank with greater peace of mind. In addition, couples may receive competitive offers from the banks when shopping around.
“Conversely, if one party has a poor credit score and low affordability, it may hinder chances of being approved for a home loan.”
Divorce impacts
Sathekge explains that in the case of divorce … “If a couple has not previously opted to formally register the customary marriage and wishes to file for divorce, they will need to go to court and get a divorce order. They will also be required to produce affidavits to prove that they are married.”
Assets are divided equally between the two parties in a customary marriage unless an ante-nuptial agreement shows otherwise.
Guidance
“We advise couples to work closely with a trusted provider to ensure that they have undergone all the mandatory checks prior to applying for a home loan,” says Lombard. Property practitioners should, ideally, be checking that traditionally married couples understand their marriage contract and the implications it has on buying, to prevent disappointment by buyer’s or seller’s if a home loan application is denied.
Source: Property Professional
