Division Of Property Between Unmarried Couples

Division Of Property Between Unmarried Couples

In South African law there is a very general and prevalent misunderstanding that common law marriages exist. This is not the case. Regardless of how long the parties have been living together their relationship has not automatically become a common law marriage. Therefore, there is no law regulating the rights of the parties in a cohabitation relationship – i.e. two parties living together over any period of time.

Couples’ cohabitation relationships are not formally recognised by the law as a marriage. Therefore they do not have the same rights and duties as those of married couples.

In South Africa, cohabitation relationships have become more common. This has developed a widespread perception that marriages do not work and mostly result in divorces; thus people are choosing to simply live together as a couple without actually getting married. They think it gives them all the benefits without any of the liabilities.

Although this may sound like a good idea - not paying to have a marriage registered and no stress about the costs of a divorce should things fail - neither party’s rights are protected, and there is no set way to dissolve such a relationship and deal with the property involved.

There is however a Domestic Partnerships Bill that was published in 2008 as many people feel that South African law on this matter is unsatisfactory. The issue at hand is that it is still a Bill, this means that it is not yet law and therefore not enforceable.

It has occasionally happened that our Courts have come to the assistance of such parties by deciding that an express or implied Universal Partnership exists between them (very similar to a signed contract). A Universal Partnership exists when parties act in a way similar to that of partners to a company in all material respects without explicitly entering into a Partnership Agreement. However, to prove a Universal Partnership is very difficult as there are a number of requirements that need to be proven, such as;

  • The aim of the partnership is to make a profit;
  • Both parties must contribute to the enterprise;
  • The partnership must operate to the benefit of both parties; &
  • The contract between the parties must be legitimate.

To succeed with a Universal Partnership claim, it must be proven that:

  • Both partners contributed to a specific joint venture in some form or other through their labour, capital or skill;
  • The venture was conducted for the benefit of both partners;
  • The venture was conducted for profit; and
  • A Universal Partnership came into existence.

However, a feasible option is that the parties may draw up some kind of agreement between themselves that would determine the ways in which the property that was bought during the course of the relationship, will be split up in the event of their relationship breaking down.

If there is no Universal Partnership between the cohabitees (parties living together), property bought by one of the cohabitees during the relationship will belong to the purchaser, with the normal rules of acquisition of property being applicable. The person to whom the property is delivered will be the owner of the property unless the other partner in the relationship can prove that the property was bought by way of an agency agreement and the partner was given money and instruction to buy it on his/her behalf. Donations made between the cohabitees cannot be claimed back by the donor.

If the partners acquire goods jointly, they each have a right to the property, even after termination of the relationship, and one of the partners can therefore not be excluded from the use and control of such property. If the couple is, upon termination of the relationship, unable to agree upon the manner in which such goods are to be divided, either party may approach the Court for relief by instituting the actio communi dividundo (an action to divide the property held in common). The Court has a wide discretion and may make any order that appears to be fair and equitable in the circumstances, including an order to the effect that one of the partners shall pay a sum to the other in order to equalise the division or an award to one of the cohabitees subject to the payment of compensation to the other.

Although there are laws in which cohabitants are included within the definition of a spouse, none of those laws apply to any duties of support between the parties.

When it comes to the property aspect of a cohabitation relationship, a partner may apply to the Court to divide the property of the other partner in a fair manner. The partner who wishes to apply for this order needs to show that he/she contributed, directly/indirectly, to the increase of the other partner’s separate property during the relationship.

It can therefore be seen that the most efficient way of ensuring that your rights are protected in a cohabitation relationship is to draw up and sign a Partnership Agreement which shall include the way in which the property is to be split up between the parties should division of property ever become an issue in the future.

DUNCAN O’CONNOR

Candidate Attorney