MAR­RIED IN COM­MU­NITY OF PROP­ERTY?

Daily Dispatch - - FRONT PAGE - An­gus Pringle

It is im­por­tant to know what rights part­ners have in dif­fer­ent le­gal sce­nar­ios

“My mother and fa­ther were mar­ried in com­mu­nity of prop­erty. They of­ten joked by say­ing that they could get out of any con­tract as long as only one of them signed be­cause the law re­quired that both of them must al­ways sign. As a busi­ness owner, through the years I’ve al­ways won­dered whether this is cor­rect, and how care­ful a busi­ness needs to be when deal­ing with cou­ples mar­ried in com­mu­nity of prop­erty?” In a mar­riage in com­mu­nity of prop­erty, our South African law de­ter­mines that spouses to such a mar­riage have one joint es­tate and each party to the mar­riage has the right to per­form ju­ris­tic acts with re­gard to the joint es­tate as they are equal man­agers of the joint es­tate.

This does not, how­ever, mean that a spouse can do as he or she pleases when it comes to trans­ac­tions that in­volve the joint es­tate.

The rights of spouses mar­ried in com­mu­nity of prop­erty to en­ter into trans­ac­tions re­lat­ing to their joint es­tate is gov­erned by Sec­tion 15 of the Mat­ri­mo­nial Prop­erty Act 88 of 1984 (the “Act”). Although in gen­eral a spouse may per­form any ju­ris­tic act in re­spect of the joint es­tate with­out the con­sent of the other, there are a num­ber of trans­ac­tions listed in the act that do re­quire the con­sent of the other spouse, in­clud­ing cer­tain for­mal­i­ties which may also need to be com­plied with in or­der to ev­i­dence the con­sent.

For a num­ber of the trans­ac­tions listed in the act, the con­sent of the other spouse can be ob­tained af­ter the act to rat­ify the trans­ac­tion, pro­vided such con­sent is ob­tained within a rea­son­able pe­riod of time af­ter the trans­ac­tion.

But such rat­i­fi­ca­tion is not pos­si­ble with all trans­ac­tions, such as for ex­am­ple the sale of im­mov­able prop­erty, or the en­ter­ing into a con­tract of surety – un­der­stand­ably, given the im­por­tant con­se­quences for the joint es­tate of such trans­ac­tions.

It is also clear from the act that spouses mar­ried in com­mu­nity of prop­erty are re­quired to com­ply with the act and en­sure that the nec­es­sary con­sents and for­mal­i­ties are met.

But where does this leave a third party con­tract­ing with a spouse mar­ried in com­mu­nity of prop­erty?

The act reg­u­lates this po­si­tion by deter­min­ing that when a spouse en­ters into a trans­ac­tion with a third party with­out the nec­es­sary con­sent and the third party does not know (or can­not rea­son­ably know) that the nec­es­sary con­sent has not been ob­tained, it is deemed that the nec­es­sary con­sent has been given.

What this boils down to is a con­sid­er­a­tion of the in­ter­ests of the par­ties and a weigh­ing up of the in­ter­ests of the in­no­cent spouse against the prej­u­dice the third party would suf­fer should the trans­ac­tion be set aside or con­tinue. To ben­e­fit from the pre­sump­tion pro­vided for in the act, the ac­tions of the third party are rel­e­vant. In in­stances where the third party knew that the spouse who en­tered into the trans­ac­tion did not act with con­sent or should have rea­son­ably known, the third party will not be able to en­joy the pro­tec­tion of the pre­sump­tion and the trans­ac­tion may be in­valid for lack of con­sent. This trans­lates into a duty of in­quiry for busi­nesses – mak­ing it a pru­dent busi­ness prac­tice for any busi­ness that con­cludes trans­ac­tions where con­sent would typ­i­cally be re­quired to en­sure that the nec­es­sary spousal con­sents have been ob­tained.

It does not mean that spouses mar­ried in com­mu­nity of prop­erty can “get out of any con­tract” by not hav­ing the con­sent of both spouses, as the act is clear in ex­pect­ing such spouses to meet the let­ter of the law, but it does at the same time not blindly pro­tect a third party that “should have known bet­ter” at the cost of the in­no­cent spouse. An­gus Pringle is an at­tor­ney with Drake Flem­mer & Orsmond At­tor­neys. He can be con­tacted on 043 722 4210.

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