Beware a Marriage In Community of Property as regulated by the Matrimonial Property Act. While this marital regime sounds romantic as it grants equal powers to partners married in community of property in practice it creates a lot of practical issues, conflict and exposes one or both parties to the creditors and business risk of the other spouse.
As the parties has the same powers with regard to the disposal of the assets of the joint estate, the contracting of debts a spouse in a marriage in community of property may not perform any juristic act with regard to the joint estate without the consent of the other spouse. We strongly advise against a marriage in community of property.
Such a spouse shall not without the written consent of the other spouse—
(a) alienate, mortgage, burden with a servitude or confer any other real right in any immovable property forming part of the joint estate;
(b) enter into any contract for the alienation, mortgaging, burdening with a servitude or conferring of any other real right in immovable property forming part of the joint estate;
(c) alienate, cede or pledge any shares, stock, debentures, debenture bonds, insurance policies, mortgage bonds, fixed deposits or any similar assets, or any investment by or on behalf of the other spouse in a financial institution, forming part of the joint estate;
(d) alienate or pledge any jewellery, coins, stamps, paintings or any other assets forming part of the joint estate and held mainly as investments;
(e) withdraw money held in the name of the other spouse in any account in a banking institution, a building society Of the Post Office Savings Bank of the Republic of South Africa;
(f) enter, as a consumer, into a credit agreement to which the provisions of the National Credit Act, 2005.
(g) as a purchaser enter into a contract as defined in the Alienation of Land Act, 1981 (Act 68 of 1981), and to which the provisions of that Act apply;
(h) bind himself as surety.
A spouse shall not without the consent of the other spouse—
(a) alienate, pledge or otherwise burden any furniture or other effects of the common household forming part of the joint estate;
(b) receive any money due or accruing to that other spouse or the joint estate by way of—
(i) remuneration, earnings, bonus, allowance, royalty, pension or gratuity, by virtue of his profession, trade, business, or services rendered by him;
(ii) damages for loss of income contemplated in subparagraph (i);
(iii) inheritance, legacy, donation, bursary or prize left, bequeathed, made or awarded to the other spouse;
(iv) income derived from the separate property of the other spouse;
(v) dividends or interest on or the proceeds of shares or investments in the name of the other spouse;
(vi) the proceeds of any insurance policy or annuity in favour of the other spouse;
(c) donate to another person any asset of the joint estate or alienate such an asset without value, excluding an asset of which the donation or alienation does not and probably will not unreasonably prejudice the interest of the other spouse in the joint estate, and which is not contrary to the provisions of subsection (2) or paragraph (a) of this subsection.
(4) The consent required for the purposes of paragraphs (b) to (g) of subsection (2), and subsection (3) may, except where it is required for the registration of a deed in a deeds registry, also be given by way of ratification within a reasonable time after the act concerned.
(5) The consent required for the performance of the acts contemplated in paragraphs (a), (b), (f), (g) and (h) of subsection (2) shall be given separately in respect of each act and shall be attested by two competent witnesses.
(6) The provisions of paragraphs (b), (c), (f), (g) and (h) of subsection (2) do not apply where an act contemplated in those paragraphs is performed by a spouse in the ordinary course of his profession, trade or business.
(7) Notwithstanding the provisions of subsection (2)(c), a spouse may without the consent of the other spouse—
(a) sell listed securities on the stock exchange and cede or pledge listed securities in order to buy listed securities;
(b) alienate, cede or pledge—
(i) a deposit held in his name at a building society or banking institution;
(ii) building society shares registered in his name.
(8) In determining whether a donation or alienation contemplated in subsection (3)(c) does not or probably will not unreasonably prejudice the interest of the other spouse in the joint estate, the court shall have regard to the value of the property donated or alienated, the reason for the donation or alienation, the financial and social standing of the spouses, their standard of living and any other factor which in the opinion of the court should be taken into account.
(9) When a spouse enters into a transaction with a person contrary to the provisions of subsection (2) or (3) of this section, or an order under section 16(2), and—
(a) that person does not know and cannot reasonably know that the transaction is being entered into contrary to those provisions or that order, it is deemed that the transaction concerned has been entered into with the consent required in terms of the said subsection (2) or (3), or while the power concerned of the spouse has not been suspended, as the case may be;
(b) that spouse knows or ought reasonably to know that he will probably not obtain the consent required in terms of the said subsection (2) or (3), or that the power concerned has been suspended, as the case may be, and the joint estate suffers a loss as a result of that transaction, an adjustment shall be effected in favour of the other spouse upon the division of the joint estate.
Want of consent, and suspension of powers of spouse
(1) When a spouse withholds the consent required in terms of subsection (2) or (3) of section 15, or section 17, or when that consent, can for any other reason not be obtained, a court may on the application of the other spouse give him leave to enter into the transaction without the required consent if it is satisfied, in the case where the consent is withheld, that such withholding is unreasonable or, in any other case, that there is good reason to dispense with the consent.
(2) If a court is satisfied that it is essential for the protection of the interest of a spouse in the joint estate, it may on the application of that spouse suspend for a definite or an indefinite period any power which the other spouse may exercise under this Chapter.
Litigation by or against spouses
(1) A spouse married in community of property shall not without the written consent of the other spouse institute legal or proceedings against another person or defend legal proceedings instituted by another person, except legal proceedings—
(a) in respect of his separate property;
(b) for the recovery of damages, other than damages for patrimonial loss, by reason of the commission of a delict against him;
(c) in respect of a matter relating to his profession, trade or business.
(2) A party to legal proceedings instituted or defended by a spouse may not challenge the validity of the proceedings on the ground of want of the consent required in terms of subsection (1).
(3) If costs are awarded against a spouse in legal proceedings instituted or defended by him without the consent required in terms of subsection (1), the court may, with due regard to the interest of the other spouse in the joint estate and the reason for the want of consent, order that those costs be recovered from the separate property, if any, of the first-mentioned spouse and, in so far as those costs cannot be so recovered, that they be recovered from the joint estate, in which case the court may order that upon the division of the joint estate an adjustment shall be effected in favour of the other spouse.
(4)
(a) An application for the surrender of a joint estate shall be made by both spouses.
(b) An application for the sequestration of a joint estate shall be made against both spouses: Provided that no application for the sequestration of the estate of a debtor shall be dismissed on the ground that such debtor’s estate is a joint estate if the applicant satisfies the court that despite reasonable steps taken by him he was unable to establish whether the debtor is married in community of property or the name and address of the spouse of the debtor.
(5) Where a debt is recoverable from a joint estate, the spouse who incurred the debt or both spouses jointly may be sued therefor, and where a debt has been incurred for necessaries for the joint household, the spouses may be sued jointly or severally therefor. had immediately before the commencement of this Act.
