Cohabitation and Living Together

Gone are the days of “single” or “married”. You only have to look at Facebook’s relationship declaration options to know that today’s partnerships come in all shapes and sizes. But what are the financial risks of being involved in a long-term relationship that is not formally recognized as a marriage?

Patterns of marriage, divorce and cohabiting without marriage had been changing for years. The incidences of domestic partnerships are growing throughout the world, according to the 1996 census, 1.3million people described themselves as living with a partner. When the 2001 census came around, this figure had almost doubled to nearly 2.4million. Many people believe that, if they live together for some time, the relationship will be recognized by the state, and there will be legal rights, duties and protection. But there was no such thing as common-law marriage – because the concept has been abolished worldwide. The time a couple spend living together does not translate into a default marriage. The consequence is that, at the dissolution of the relationship, the assets or any obligations are determined or distributed on a basis of the arrangement that parties used during their relationship.

Domestic partnerships were never prohibited in South African law – but neither did they enjoy any noteworthy recognition or protection. In SA, marriage laws traditionally provided parties with a variety of legal protections. These laws governed what happened to the property of the parties during the marriage and on dissolution, either by divorce or death, and also meant that certain benefits were automatically acquired, such as membership of medical aid funds, pension funds, etc. Married spouses also had a reciprocal duty of support under the common law. South African courts had occasionally helped couples by deciding that an express or implied universal partnership existed, but this was usually difficult to prove. The only way to be protected in our law is to enter into a cohabitation agreement. Such an agreement clarifies the expectations of the partners and also serves as an early warning of future problems.

A cohabitation agreement will determine what would happen to the property and assets of the couple if they should decide to separate. The agreement is, however, not enforceable in so far as third parties are concerned.

However, in terms of the 2005 Children’s Act, the parents of children born out of wedlock had a duty to maintain their offspring, irrespective of the living arrangements. Basically a cohabitation agreement regulates rights and duties between the partners. It could almost be compared to an antenuptial contract entered into prior to the conclusion of a civil marriage. The agreement can provide for the division and distribution of assets upon dissolution: for instance, the formal agreement may set out the rights and obligations towards each other; the respective financial contributions to the joint home; clarify arrangements regarding ownership of property that they may purchase jointly and the division of their jointly owned assets should they separate.

An agreement such as this will be legally binding as long as it contains no provisions that are immoral or illegal. If there is no agreement on the dissolution of a domestic partnership agreement, a party would only be entitled to retain those assets which he or she has purchased and owns and further would be entitled to share in the assets proportionately in terms of the contribution which they have made to the partnership. However, problems arose if a partner tried to enforce a domestic partnership agreement if the partner being sued was married to someone else. It has been argued that in such cases domestic partnership agreements violate public policy to the extent that they impair the community of property rights (where applicable) of the lawful married spouse.

The Domestic Partnerships Bill was still being formulated, and it wasn’t clear how it would be implemented. In the current constitutional dispensation it is unlikely that a partner will be left in despair, taking into account the Domestic Partnerships Bill. My advice would be for cohabiting couples to enter into a contract – a written partnership agreement that states exactly what will happen in the event of death or a split, protecting their rights and outlining their obligations. For example, when it comes to the ownership of property, the contract should state what happens to ownership of the property (such as one spouse buying out the other) or payments in the event of death or a split. Putting any relationship into writing is always helpful, even if it’s just adding someone on your medical aid as a dependant. “Having said that, in the event of death, having a will is always the best idea. Out of the bounds of a legally recognised marriage there is no intestate succession – meaning there is no automatic participation in the estate to make sure the other partner is looked after. Joint accounts never a good idea Money is one of the most important matters a couple needs to resolve when contemplating living together or marriage. One issue that often comes up in these kinds of discussions is whether to have a joint bank account. In many ways, this can seem like an appealing option. However, most financial experts don’t recommend having a joint account at all.

One never encourage a joint account because whether you are married or living together, you both need to grow your assets and get a good credit rating. Having a joint account invariably makes it difficult for one of the partners to do so. Besides, a joint bank account puts one partner at great risk in the event of a break-up, death or financial difficulties. There is no joint bank account with two equal account holders. A ‘joint’ account is actually an account in one person’s name, to which the other person is a signatory. This causes a number of complications for that signatory. The most important of these is that without a bank account in your name, you will have no credit record at the bank – which makes it difficult to get credit at shops, open a cellphone account or apply for a loan. In the event of a break-up, the joint account could be emptied by one partner or the person in whose name the bank account is held could remove the second signatory. If one partner dies, banks tend to freeze the account until the estate is resolved – leaving the signatory partner with no access to the funds for an extended time. One should advise couples to split responsibility for monthly expenses, or open an account for the household into which both pay a portion of their salaries for general expenses.

Who gets your pension? There are typically two types of benefits payable to “spouses”. Firstly pensions, which are payable to those who qualify as spouses – and that would depend on how each fund defines an ‘eligible spouse’: people must check the fund rules to see if their partner/spouse would qualify. Fund rules may stipulate that you must be married to the same person at date of retirement and date of death for them to qualify for a spouse’s pension. This prevents so-called ‘death-bed marriages’ where a pensioner marries someone much younger than them after they have already retired – and on their death the fund realises that there is a much younger spouse to whom they have a liability to pay a pension for many years.

The second benefit type is the typical fund benefit (fund credit or share of fund) plus an insured multiple of a salary (three times annual salary, for example). This is allocated by the trustees, to your dependants and nominees. A dependant includes a spouse; the Pension Funds Act defines a spouse as a person who is the permanent life partner or spouse or civil union partner of a member in accordance with the Marriage Act, Recognition of Customary Marriages Act, Civil Union Act or the tenets of a religion. A very wide definition. To ensure that no partner is overlooked, the pension fund member should always nominate a beneficiary in the relevant form to help the trustees – although trustees are not absolutely bound to follow that nomination. Unfortunately, when it comes to death and money such decisions by fund trustees are often contested.

Here is a very basic Cohabitation Agreement:

Cohabitation Agreement

The following form is intended for illustrative purposes only. You and your attorney can use this sample as a guide in drafting a cohabitation agreement that best protects your interests and complies with the laws in effect where you live.

Why do I need a Cohabitation Agreement?

A Cohabitation Agreement sets out the financial terms of a couple’s relationship, and provides protection for the parties upon death, or should the relationship fail. 

Who should use a Cohabitation Agreement?

Any unmarried couple in a relationship and living with each other could find this agreement useful.

Also known as:

• Conditions of Cohabitation
• Cohabitation Contract

It is advisable that you contact an attorney in regard to drafting such an agreement.

COHABITATION AGREEMENT

Between

(The 1^st Party)

and

(The 2^nd Party)

PREAMBLE

WHEREAS

1.  The parties are currently living together in a domestic partnership and intend to continue living together in this arrangement;

2.  The parties wish to define their respective proprietary rights and liabilities arising from their domestic partnership arrangement;

3.  The parties each acknowledge that they enter into this agreement voluntarily, without any duress or undue influence, and that each has had the opportunity to consult with an attorney of his/her choice;

 

 

THE PARTIES AGREE:

 

1.         Marital Status

The joint residency of the parties shall in no way render the parties married in any way, whether by operation of common law or any other law.

2.         The Agreement

2.1       This Agreement consists solely of the mutual promises contained herein and the mutual promises of each party to act as the living companion and partner to the other.

2.2       This Agreement fully contemplates and compensates any and all services provided by either party for the benefit of the other during the course of their joint residency. The furnishing of sexual services shall in no way be construed as consideration for this Agreement.

3.         Disclosure of Current Financial Status

Each party has fully and completely, to the best of his/her knowledge, disclosed to the other party his/her current financial condition including all assets and liabilities. Each party has attached a balance sheet to this agreement indicating his/her current assets and liabilities with the understanding that this balance sheet reflects his/her current financial status to the best of his/her ability.

4.         Division of Living Expenses

Necessary and jointly approved living expenses shall be divided between the parties as below:

4.1       The 1^st Party shall contribute _____________ percent ( ____%) per month;

4.2       The 2^nd Party shall contribute _____________ percent ( ____%) per month.

The parties shall contribute their monthly pro rata contributions into the joint savings/current account of the parties. Any property purchased using funds in this account shall be considered to be the joint property of the parties and owned according to the respective party’s percentage of contribution as stated above. Either party may draw upon this checking account.

5.         Separate Property

The following properties shall be kept by the parties as the separate property of the recipient and the said properties shall not be subject to division at the termination of this Agreement:

5.1       All and any property, real or personal, owned by a specific party at the date of execution of this Agreement;

5.2       Individual gifts, bequests or inheritances acquired before or after the execution of this Agreement;

5.3       Individual earnings, salary or wages acquired before or after the execution of this Agreement;

5.4       All income or proceeds derived from the aforementioned properties.

6.         Commingling of Property

All commingled property shall be presumed to be joint property of the parties unless otherwise agreed.

7.         Joint Property

All property acquired by the parties after the date of execution of this Agreement and before the termination of this Agreement and procured jointly with joint resources and funds shall be considered joint property of the parties with each party possessing his/her aforementioned percentage of ownership.

8.         Division of Property upon Termination

Upon termination of this Agreement or termination of the joint residency, all jointly owned property shall be divided among the parties according to their pro rata share listed above.  If the parties are unable to agree on the appropriate division of joint property, they may appoint an independent and mutually agreed upon Third-party to act as Appraiser.  The Appraiser shall divide the property among the parties according to his/her pro rata share.

9.         Duty of Good Faith and Confidentiality

9.1       This Agreement creates a fiduciary relationship between the parties in which each party agrees to act with the utmost of good faith and fair dealing toward the other in the management of their joint property and in all other aspects of this Agreement.

9.2       Without obtaining a parties’ written consent in advance, a party shall not directly or indirectly publish, or cause to be published, any diary, memoir, letter, story, photograph, interview, article, essay, account, or description or depiction of any kind whatsoever, whether fictionalised or not, concerning the relationship or any other aspect of a parties’ personal, business or financial affairs, or assist or provide information to others in connection with the publication or dissemination of any such material or excerpts thereof.

10.       Legal Names of Parties

Each party shall retain his/her legal name, including surname, as printed and signed in this Agreement.

 

11.       Duration of Agreement

This Agreement shall become effective at the date of execution and shall remain in effect until termination. Termination shall be effected by written notice by either party, cessation of the joint residency by either party or death of either party.  Either party may terminate this Agreement unilaterally at any time.

12.       Death of Party

Upon the death of either party, the surviving party waives all rights to support by the deceased party.

13.       Complete Agreement

It is the intent of the parties that this Agreement be the full and complete agreement between the parties regarding their joint residency.  No variation of this agreement shall be of force or effect unless reduced to writing and signed by both parties.

14.       Severability of Provisions

Should any paragraph or provision of this Agreement be held invalid, void, or otherwise unenforceable, it is the intent of the parties that the remaining portions shall nevertheless continue in full force and effect without impairment.

15.       Governing Law

This Agreement shall be governed by, interpreted and construed in accordance with the laws of the Republic of South Africa.

DATED at                                     this                  day of                                    201_

AS WITNESSES:

 

1.

 

2.

 

DATED at                                     this                  day of                                    201_

AS WITNESSES:

 

1.

 

2.

About the author:

Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in most sectors of the law and 13 years as a practicing attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com and is frequently quoted on Family Law issues in newspapers such as the Sunday Times and Business Times. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, international divorce law, digital rights, media law and criminal law.

Email: info@divorceattorney.co.za

Living together, make sure you have a cohabitation agreement, otherwise you leave with nothing!

Personal finance: If you don’t say ‘I do”, get it in writing – Interview with Bertus Preller – Family Law Attorney

Gone are the days of “single” or “married”. You only have to look at Facebook’s relationship declaration options to know that today’s partnerships come in all shapes and sizes.

But what are the financial risks of being involved in a long-term relationship that is not formally recognised as a marriage?

We quizzed some experts to find out the best ways to protect yourself if you don’t fancy walking down the aisle with your life partner.

Family law attorney Bertus Preller said patterns of marriage, divorce and cohabiting without marriage had been changing for years.

“The incidences of domestic partnerships are growing throughout the world.”

Preller said that, according to the 1996 census, 1.3million people described themselves as living with a partner. When the 2001 census came around, this figure had almost doubled to nearly 2.4million.

Many people believe that, if they live together for some time, the relationship will be recognised by the state, and there will be legal rights, duties and protection.

But Preller said there was no such thing as common-law marriage – because the concept has been abolished worldwide.

“The time a couple spend living together does not translate into a default marriage. The consequence is that, at the dissolution of the relationship, the assets or any obligations are determined or distributed on a basis of the arrangement that parties used during their relationship,” he said.

Domestic partnerships were never prohibited in South African law – but neither did they enjoy any noteworthy recognition or protection, Preller said.

“In SA, marriage laws traditionally provided parties with a variety of legal protections. These laws governed what happened to the property of the parties during the marriage and on dissolution, either by divorce or death, and also meant that certain benefits were automatically acquired, such as membership of medical aid funds, pension funds, etc.

“Married spouses also had a reciprocal duty of support under the common law.”

Preller said South African courts had occasionally helped couples by deciding that an express or implied universal partnership existed, but this was usually difficult to prove.

“The only way to be protected in our law is to enter into a cohabitation agreement. Such an agreement clarifies the expectations of the partners and also serves as an early warning of future problems.

“A cohabitation agreement will determine what would happen to the property and assets of the couple if they should decide to separate. The agreement is, however, not enforceable in so far as third parties are concerned.”

However, in terms of the 2005 Children’s Act, the parents of children born out of wedlock had a duty to maintain their offspring, “irrespective of the living arrangements”, Preller said.

“Basically a cohabitation agreement regulates rights and duties between the partners.

“It could almost be compared to an antenuptial contract entered into prior to the conclusion of a civil marriage.

“The agreement can provide for the division and distribution of assets upon dissolution: for instance, the formal agreement may set out the rights and obligations towards each other; the respective financial contributions to the joint home; clarify arrangements regarding ownership of property that they may purchase jointly and the division of their jointly owned assets should they separate,” said Preller.

“An agreement such as this will be legally binding as long as it contains no provisions that are immoral or illegal.

“If there is no agreement on the dissolution of a domestic partnership agreement, a party would only be entitled to retain those assets which he or she has purchased and owns and further would be entitled to share in the assets proportionately in terms of the contribution which they have made to the partnership.”

Preller said, however, that problems arose if a partner tried to enforce a domestic partnership agreement if the partner being sued was married to someone else.

“It has been argued that in such cases domestic partnership agreements violate public policy to the extent that they impair the community of property rights (where applicable) of the lawful married spouse.”

He said the Domestic Partnerships Bill was still being formulated, and it wasn’t clear how it would be implemented.

“In the current constitutional dispensation it is unlikely that a partner will be left in despair, taking into account the Domestic Partnerships Bill,” Preller said.

Fiona Renton, head of the legal services department at financial and risk services provider Alexander Forbes, said: “My advice would be for cohabiting couples to enter into a contract – a written partnership agreement that states exactly what will happen in the event of death or a split, protecting their rights and outlining their obligations.

“For example, when it comes to the ownership of property, the contract should state what happens to ownership of the property (such as one spouse buying out the other) or payments in the event of death or a split.

“Putting any relationship into writing is always helpful, even if it’s just adding someone on your medical aid as a dependant.

“Having said that, in the event of death, having a will is always the best idea.

“Out of the bounds of a legally recognised marriage there is no intestate succession – meaning there is no automatic participation in the estate to make sure the other partner is looked after.”

Joint accounts never a good idea

Money is one of the most important matters a couple needs to resolve when contemplating living together or marriage, according to Sugendhree Reddy, director of banking products at Standard Bank.

“One issue that often comes up in these kinds of discussions is whether to have a joint bank account. In many ways, this can seem like an appealing option.

“However, most financial experts don’t recommend having a joint account at all. We never encourage a joint account because whether you are married or living together, you both need to grow your assets and get a good credit rating. Having a joint account invariably makes it difficult for one of the partners to do so. Besides, a joint bank account puts one partner at great risk in the event of a break-up, death or financial difficulties.”

Reddy said there was no joint bank account with two equal account holders. “A ‘joint’ account is actually an account in one person’s name, to which the other person is a signatory. This causes a number of complications for that signatory. The most important of these is that without a bank account in your name, you will have no credit record at the bank – which makes it difficult to get credit at shops, open a cellphone account or apply for a loan.”

In the event of a break-up, Reddy said, the joint account could be emptied by one partner or the person in whose name the bank account is held could remove the second signatory.

If one partner dies, “banks tend to freeze the account until the estate is resolved – leaving the signatory partner with no access to the funds for an extended time”, said Reddy.

Reddy advises couples to split responsibility for monthly expenses, or open an account for the household into which both pay a portion of their salaries for general expenses.

Who gets your pension?

There are typically two types of benefits payable to “spouses”, says Fiona Renton, head of legal services at Alexander Forbes.

“Firstly pensions, which are payable to those who qualify as spouses – and that would depend on how each fund defines an ‘eligible spouse’: people must check the fund rules to see if their partner/spouse would qualify.

“Fund rules may stipulate that you must be married to the same person at date of retirement and date of death for them to qualify for a spouse’s pension. This prevents so-called ‘death-bed marriages’ where a pensioner marries someone much younger than them after they have already retired – and on their death the fund realises that there is a much younger spouse to whom they have a liability to pay a pension for many years.”

The second benefit type is the typical fund benefit (fund credit or share of fund) plus an insured multiple of a salary (three times annual salary, for example).

“This is allocated by the trustees, to your dependants and nominees.

“A dependant includes a spouse; the Pension Funds Act defines a spouse as ‘a person who is the permanent life partner or spouse or civil union partner of a member in accordance with the Marriage Act, Recognition of Customary Marriages Act, Civil Union Act or the tenets of a religion. A very wide definition.”

To ensure that no partner is overlooked, the pension fund member should always nominate a beneficiary in the relevant form to help the trustees – although trustees are not absolutely bound to follow that nomination, said Renton.

“Unfortunately, when it comes to death and money such decisions by fund trustees are often contested.”

No maintenance for a sacked lover

Not so long ago I wrote an article about the fact that in South African law there is in fact no such thing as a common law marriage and that partners that cohabitates or live together in a domestic partnership will in fact have no right to claim maintenance from one another. In fact, this was exactly what the Supreme Court of Appeal ruled this week in the matter of McDonald v Young (292/10) [2011] ZASCA 31 on 24 March 2011.

The facts of this case were as follows.

The parties were involved in a relationship and had cohabited, as man and wife, for approximately seven years from June 1999 until May 2006. After the relationship broke down, the appellant instituted an action against the respondent in the Western Cape High Court (Cape Town) for an order declaring that a joint venture agreement existed between the parties in respect of immovable property (the property) situate at Port Island, Port St Francis, in the Eastern Cape, alternatively, for an order that the respondent pay maintenance to the appellant. The high court (Veldhuizen J) found that the appellant had failed to prove the existence of a joint venture agreement and, in respect of the maintenance claim, that there was no duty on the respondent to support the appellant. The appellant appealed to the Supreme Court with the leave of the high court.

The issues on appeal, as in the high court, wer whether the appellant has established the existence of a joint venture agreement between the parties, alternatively, whether the respondent is under a duty (by operation of law, or alternatively, by virtue of a tacit contract) to support the appellant subsequent to their cohabitation.

Shortly after the parties were introduced to each other the appellant took up residence with the respondent at her farm in Knysna. The appellant’s main business interest was the promotion and marketing of surfing and surfboard products. During 1999, the appellant and his Durban-based brother had been in the process of establishing a new business, Inter Surf Africa Exporters (ISAE), which was involved in the manufacture and export of surfboards. The appellant did not possess any meaningful assets and had very limited income. The respondent, on the other hand, was a woman of considerable means. She had an annual cash income in excess of R1,3m and possessed substantial assets. When the appellant and the respondent met, they were 59 and 54 years of age, respectively. It was common cause that the appellant had not been in receipt of a regular income and had, for a time, during the course of the relationship, received a monthly allowance from the respondent.

The appellant’s claim to a half-share in the property was based on an express oral joint venture agreement concluded by the parties. The appellant testified that the terms of the agreement were that the respondent would contribute financially to the acquisition, completion and refurbishment of the property while the appellant would contribute his time and expertise to oversee the development of the property. According to the appellant, it was agreed that they would each share jointly in the property. The appellant testified that the primary objective of the agreement was to ensure that he gained financial independence. Despite the fact that the property was to have been registered in both their names, it was subsequently agreed, according to him, that the property would be registered in the respondent’s name for tax purposes. It was common cause that the initial written agreement had reflected both their names as purchasers of the property.

It was contended, on behalf of the appellant, that the high court had erred in failing to accept and rely on the appellant’s evidence regarding the agreement, having particular regard to the fact that his evidence was unchallenged. It was further contended that the respondent’s failure to testify was fatal to her case and that this court was obliged to accept his unchallenged evidence in respect of both the agreement and the claim for maintenance.

In our law it is settled that uncontradicted evidence is not necessarily acceptable or sufficient to discharge an onus. In Kentz (Pty) Ltd v Power, Cloete J undertook a careful review of relevant cases where this principle was endorsed and applied. The learned judge pointed out that the most succinct statement of the law in this regard is to be found in Siffman v Kriel, where Innes CJ said:

‘It does not follow, because evidence is uncontradicted, that therefore it is true . . . The story told by the person on whom the onus rests may be so improbable as not to discharge it.’

It was thus necessary to consider the appellant’s evidence in detail. It was clear from the judgment of the high court that it was mindful that the appellant’s evidence, in order to be reliable, had to be credible. The high court, on the evidence, reached the conclusion that the respondent had ‘initially intended that the contract should reflect the [appellant] as one of the purchasers’. However, it did not accept his evidence in its entirety and went on to find that the appellant had failed to prove the existence of a joint venture agreement.

In the Judge’s view, there were a number of unsatisfactory aspects in the appellant’s evidence. It was significant noted by the court how the appellant’s claim against the respondent has developed over time. During May 2006 and shortly after the parties parted ways, they met, in the presence of their respective attorneys, with a view to settle the disputes between them. The appellant’s evidence regarding the claim he had advanced at that meeting, was as follows:

‘So the idea was to try and settle the split between yourself and Mrs Young? — I accept ─ I looked at it like that because it did look like we weren’t going to get together again, so I assumed that that was the reason.

And what were your claims that day? — My claims that day with regards to my share of Port St Francis, with regards to my contribution I had made over the seven years and discussion on my contract with the bakkie.’

This was in stark contrast to his testimony in the magistrate’s court to the effect that he had, at the time of the meeting, been under the impression that he did not have a claim against the respondent and that the claim had ‘materialised some time afterwards when I . . . approached some attorneys for advice’. The appellant’s explanation for the contradiction, that he had meant to convey that he had not yet ‘implemented’ his claim, is, in my view, unsatisfactory. The very purpose of the meeting was an attempt to resolve the dispute between himself and the respondent without the need to resort to litigation.

On 17 July 2006, and following upon the May 2006 meeting, the appellant’s attorney wrote a letter to the respondent’s attorney, which was intended to ‘motivate and substantiate’ the appellant’s claim against the respondent ‘as comprehensively as possible’. (The Court’s emphasis.) It was recorded in the letter that the appellant believed that a universal partnership had existed between the parties and that he was entitled to ‘some form of compensation’ (The Court’s emphasis.) for his contribution to the partnership. It is instructive that no mention was made of the appellant’s half-share in the property, despite the fact that the appellant testified that he had given his attorney instructions in this regard and that he (the appellant) had had sight of the letter prior to it being dispatched. The development of the appellant’s claim over time is not without significance.

During the period that the parties were cohabiting, the appellant drafted numerous agreements and proposals, the purpose of which was to define the financial relationship between him and the respondent. On 24 July 2003, the respondent executed a sole agency mandate in terms of which she appointed the appellant as agent to sell the property and undertook to pay a commission of ten per cent to him. It was the appellant’s testimony that the commission he would have earned was to have provided him with financial security. The appellant agreed that he had, during October 2004, drafted an agreement, aimed at resolving the constant disputes he and the respondent had had regarding his financial security. The salient terms of this agreement were that (i) he was appointed as sole agent to sell two properties, including the property which is the subject of this dispute; (ii) he would be paid a commission of ten per cent for securing the sale of the properties; and (iii) the respondent would purchase government retail bonds to the value of R500 000 on behalf of the appellant. It was also his evidence that the relationship between him and the respondent had been particularly volatile at that time and his intention, in drafting this agreement, was to achieve clarification regarding his financial position.

It was surprising that the appellant failed to mention his half-share in the property in the October 2004 proposal. This was even more surprising when regard is had to his evidence that he was at that time concerned, as there was uncertainty regarding his financial future. The wording of this proposal, as well as the agency agreement, excludes the possibility that he had acquired a share in the property. It was in the court’s view extremely improbable that had the parties agreed in 1999 when the property was purchased that they would be joint owners thereof, the appellant would not, in 2004, have recorded his right to, or even a claim for, a half-share in a proposal aimed at settling outstanding matters between him and the respondent.

Counsel for the appellant attached great importance to the fact that the initial agreement had recorded both parties’ names as purchasers. The appellant assumed that both names were inserted on the instructions of the respondent. There was no evidence to support this assumption. Even if such instructions did emanate from the respondent, it does not necessarily follow, as was found by the high court, that this meant that there was an agreement between the parties as alleged by the appellant. The recording of both parties’ names is nothing more than an indicator pointing towards the conclusion of an agreement and it is a factor to be considered in conjunction with the probabilities.

There were a number of factors that support the respondent’s denial of the existence of a joint venture agreement between the parties. These included: the claim as articulated at the meeting with their legal representatives shortly after the break-up, the letter written after that meeting, various agreements drafted by the appellant, and the unsatisfactory and often contradictory evidence given by the appellant. The court mentioned that the appellant contradicted himself on one of the essential terms of the agreement, namely, whether it was agreed that he would be entitled to half of the proceeds of the sale of the property only or the property together with its contents.

The appellant bore the onus of proving the agreement upon which he relied as well as the terms thereof. Having regard to the deficiencies in the appellant’s evidence and the probabilities, it cannot be said that it measures up to the standard required for acceptability in respect of the existence of the joint venture agreement. In Da Mata v Otto NO, Van Blerk JA, dealing with the approach to be adopted when deciding probabilities, said:

‘In regard to the appellant’s sworn statements alleging the oral agreement, it does not follow that because these allegations were not contradicted ─ the only witness who could have disputed them had died ─ they should be taken as proof of the facts involved. Wigmore on Evidence, 3rd ed., vol. VII, p. 260, states that the mere assertion of any witness does not of itself need to be believed, even though he is unimpeached in any manner, because to require such belief would be to give a quantative and impersonal measure to testimony. The learned author in this connection at p. 262 cites the following passage from a decision quoted:

“It is not infrequently supposed that a sworn statement is necessarily proof, and that, if uncontradicted, it established the fact involved. Such is by no means the law. Testimony, regardless of the amount of it, which is contrary to all reasonable probabilities or conceded facts ─ testimony which no sensible man can believe ─ goes for nothing; while the evidence of a single witness to a fact, there being nothing to throw discredit thereon, cannot be disregarded.”’

The appellant’s testimony was contrary to all reasonable probabilities and, despite the fact that it was unchallenged, counts for ‘nothing’. In assessing the probabilities, the conclusion seems to be inescapable that the appellant has not discharged the onus resting on him. It follows that the appellant was not entitled to the relief sought in respect of the main claim.

The court considered the alternative claim for maintenance and dealt first with the argument that such a duty existed by operation of law. In South African law, certain family relationships, such as parent and child and husband and wife, create a duty of support. The common law has been extended in line with the Constitution to protect contractual rights of support in the same way as the common law duty of support. In Amod v Multilateral Motor Vehicle Accidents Fund (Commission for Gender Equality Intervening), this High Court of Appeal recognised a contractual right to support arising out of a marriage in terms of Islamic law for purposes of a dependant’s action. In Du Plessis v Road Accident Fund, the common law action by a spouse, for loss of support against the wrongdoer who unlawfully kills the other spouse, was extended to partners in a same-sex permanent life relationship similar in other respects to marriage, who had tacitly undertaken reciprocal duties of support. The Constitutional Court in Satchwell v President of the Republic of South Africa & another, found that the common law duty of support, could, in certain circumstances, be extended to persons in a same-sex relationship. Madala J, writing for the court, commented as follows:

‘The law attaches a duty of support to various family relationships, for example, husband and wife, and parent and child. In a society where the range of family formations has widened, such a duty of support may be inferred as a matter of fact in certain cases of persons involved in permanent, same-sex life partnerships. Whether such a duty of support exists or not will depend on the circumstances of each case.’

Counsel for the appellant relied on Kahn, Amod and Du Plessis in support of his contention that a legal duty of support rests on the respondent. This contention was misplaced. In both Amod and Khan, the parties in respect of whom a duty of support had been alleged had been married to each other in terms of Islamic law. The ratio of the court, in both cases, was that the marriage between the parties had given rise to reciprocal contractual duties of support on the part of the parties to that marriage. In Du Plessis, Cloete JA, having had regard to the facts of that matter, concluded that the plaintiff had proved that the deceased had undertaken to support him and that the deceased had owed the plaintiff a contractual duty of support. The learned judge of appeal said:

‘In the present case the case for drawing an inference that the plaintiff and the deceased undertook reciprocal duties of support is even stronger. The plaintiff and the deceased would have married one another if they could have done so. As this course was not open to them, they went through a “marriage” ceremony which was as close as possible to a heterosexual marriage ceremony. The fact that the plaintiff and the deceased went through such a “marriage” ceremony and did so before numerous witnesses gives rise to the inference that they intended to do the best they could to publicise to the world that they intended their relationship to be, and to be regarded as, similar in all respects to that of a heterosexual married couple, ie one in which the parties would have a reciprocal duty of support. That having been their intention, it must be accepted as a probability that they tacitly undertook a reciprocal duty of support to one another.

Further support for this finding is the fact that the plaintiff and the deceased thereafter lived together as if they were legally married in a stable and permanent relationship until the deceased was killed some 11 years later; they were accepted by their family and friends as partners in such a relationship; they pooled their income and shared their family responsibilities; each of them made a will in which the other partner was appointed his sole heir; and when the plaintiff was medically boarded, the deceased expressly stated that he would support the plaintiff financially and in fact did so until he died.’

Amod, Khan and Du Plessis were decided on the basis of contracts entered into by the respective parties, and are not authority for the contention that there is a duty of support, by operation of law, on the respondent to maintain the appellant.

The question whether the relationship between the parties, a heterosexual couple who choose to live together, free from the bonds of matrimony, gives rise to a legal duty of support, could in the Judge’s view, be answered with reference to Volks NO v Robinson & others. In that matter the Constitutional Court was concerned with the interpretation and constitutionality of s 2(1), read with s 1, of the Maintenance of Surviving Spouses Act 27 of 1990, which confers on surviving spouses the right to claim maintenance from the estates of their deceased spouses if they are not able to support themselves. The court had to determine whether the exclusion of survivors of permanent life partnerships from the protection of the Act constituted unfair discrimination. Skweyiya J, writing for the majority, referred with approval to the comments made by O’Regan J in Dawood & another v Minister of Home Affairs & others; Shalabi & another v Minister of Home Affairs & others; Thomas & another v Minister of Home Affairs & others that:

‘Marriage and the family are social institutions of vital importance. Entering into and sustaining a marriage is a matter of intense private significance to the parties to that marriage for they make a promise to one another to establish and maintain an intimate relationship for the rest of their lives which they acknowledge obliges them to support one another, to live together and to be faithful to one another.

The institutions of marriage and the family are important social institutions that provide for the security, support and companionship of members of our society and bear an important role in the rearing of children. The celebration of a marriage gives rise to moral and legal obligations, particularly the reciprocal duty of support placed upon spouses and their joint responsibility for supporting and raising children born of the marriage. These legal obligations perform an important social function.’

The Constitutional Court was of the view that the law may distinguish between married people and unmarried people and may, in appropriate circumstances, accord benefits to married people which it does not accord to unmarried people. The learned justice reasoned as follows in para 55:

‘There are a wide range of legal privileges and obligations that are triggered by the contract of marriage. In a marriage the spouses’ rights are largely fixed by law and not by agreement, unlike in the case of parties who cohabit without being married.’

The court found that whilst there was a reciprocal duty of support between married persons, ‘no duty of support arises by operation of law in the case of unmarried cohabitants’. This was an unequivocal statement of the law by the Constitutional Court. Skweyiya J went on to state that to the extent that any obligations arise between cohabitants during the subsistence of their relationship, these arise by agreement and only to the extent of that agreement.

The court also considered whether a contractual duty of support towards the appellant existed. The argument, presented as a second alternative to the claim based on a joint venture, was that the court should find that the parties had entered into a tacit agreement in terms of which the respondent had agreed to support the appellant even after the end of their relationship.

The facts upon which the appellant relies in support of his claim that the respondent had assumed a duty of support towards him are the following:

(i) He and the respondent had lived together as if they were legally married in a stable and permanent relationship;

(ii) The respondent had supported him during the seven-year period that they had resided together and the appellant had been dependent on such support. She had given him an allowance, provided transport for him and paid for entertainment and overseas holidays;

(iii) The respondent had, in a series of wills, made extensive provision for financial support of the appellant in the event of her death;

(iv) The respondent was a wealthy woman while he had no assets and very limited income;

(v) He had contributed to the maintenance of and increase in value of the respondent’s estate, often at the expense of his own business interests; (vi) The appellant was reliant on an income from employment and could not, due to his advanced age, guarantee for how much longer he would be able to earn a living; and

(vii) The respondent had advised the appellant that she had sufficient funds to support both of them.

The argument that the parties had entered into a tacit agreement regarding maintenance cannot be sustained for a number of reasons. First, the reliance on a tacit contract is inconsistent with the appellant’s evidence. The appellant believed and gave evidence to the effect that he and the respondent had concluded an express agreement in respect of the property, the aim of which was to ensure that he was financially independent. Implicit in this is the intention that he would not have to rely on the respondent, or any other person, for financial support. In the circumstances, the appellant could not have formed the intention to contract tacitly with the respondent. Having regard to his evidence that the purpose of the joint venture agreement was to render him financially independent, the appellant could not at the same time have contemplated, that the respondent would continue to support him for the rest of his life. A tacit contract must not extend to more than the parties contemplated. In Rand Trading Co Ltd v Lewkewitsch the parties had erroneously assumed that there was a contract in existence between them. The court did not accept the argument that the company’s conduct in recognising the existence of the lease, paying the rent and otherwise performing in terms of the contract had created a binding contract. Solomon J said:

‘But I think the answer to that argument is a very clear one, and it is this ─ that all these facts are explained on the simple ground that both parties erroneously assumed that there was a contract in existence between them . . . And the mere fact . . . that both parties erroneously assumed that there was a contract in existence at that date altogether precludes us from now inferring a new contract.’

The appellant’s stated belief, that there was an express contract between him and the respondent in respect of the property, precludes this court from drawing an inference to the effect that the parties had entered into a tacit agreement the terms of which were inconsistent with the express agreement to which he testified. It was not open for the appellant to contend that if the court disbelieved his evidence that a joint venture agreement had been concluded, the court should infer from the proved facts that a tacit contract had come into existence, because such an inference cannot be drawn where it would conflict with what he said was the actual position. A litigant can plead, but not testify, in the alternative.

Secondly, the appellant’s evidence was that the respondent’s attitude had always been that in the event that their relationship ended, he would receive no financial benefit from her. This conduct, on the part of the respondent, is inconsistent with a tacit agreement to support the appellant. The appellant’s explanation for drafting the various proposals regarding the financial relationship between him and the respondent was as follows:

‘Well, the motivation behind it at that particular time, we were going through quite a patchy period; we were arguing and not agreeing on a lot of things. And it appeared to me that all of a sudden my situation could alter and I’d be left standing high and dry. And I discussed it with Lesley [the respondent] and I felt that if we had something in writing, and if that did occur at least I had something to fall back on . . . ’. (Emphasis added.)

It is trite that a tacit contract is established by conduct. In order to establish a tacit contract, the conduct of the parties must be such that it justifies an inference that there was consensus between them. There must be evidence of conduct which justifies an inference that the parties intended to, and did, contract on the terms alleged. It is clear from the appellant’s evidence that there was no consensus between the parties. The appellant, on his own testimony, was uncertain about his financial future. He realised that he would only be entitled to what had been agreed between the parties, hence his desire to have a written contract ‘to fall back on’. The respondent’s attitude, as testified to by the appellant, that he would leave the relationship without any financial benefit, is an indicator that she had not, tacitly or otherwise, agreed to support the appellant. I am not satisfied that this court can conclude, from all the relevant proven facts and circumstances, that a tacit contract, in terms of which the respondent undertook to financially maintain the appellant, for as long as he needed such maintenance, came into existence.

For those reasons, the appellant’s maintenance claim which is premised on a legal, alternatively, a contractual duty, failed.

Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in law and 13 years as a practising attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters and international divorce law.

Divorce and Finances some Tips by Divorce Attorney Bertus Preller

You wouldn’t think that a divorce attorney would be the first person to give advice on how best to prevent a divorce, but then, Bertus Preller, Family and Divorce Law Attorney at Abrahams and Gross Inc. in Cape Town isn’t your average divorce attorney. He is one of the most prominent divorce attorneys based in South Africa, having handled many high-profile divorces of television personalities, artists and sportsmen and being the founder of SA’s largest online divorce platform eDivorce, he is certainly in the mix of everything when it comes to Divorce and Family Law in South Africa.

Preller shared some advice when interviewed by newsbreak.

The success or failure of your marriage relationship may hinge on how well you deal with issues such as finances, sexuality, communication, conflict, parenting, in-laws, leisure time, family of origin, spirituality, expectations, and chores.

When exactly is the best time to begin talking seriously about finances with your partner?

To me, the finance talk is a pretty comprehensive discussion about how you and your partner will handle the money that comes in and goes out of your life. If you come from two different “schools” on this topic, it can be a difficult discussion to have. For someone that’s more of a “spender” they may try to deflect having the conversation at all.  You have to talk about finances at two points in the relationship. The first is when you decide to move in together and blend households, and the second is if and when you merge finances. One should never wait when things are starting to get crappy and you’re already bickering about money. When things are harmonious, you sit down and talk about these things; it will engender feelings of love and trust. You just don’t do it when things are in turmoil.

What specifically should be discussed?

If you have credit card debt, what are your thoughts on it?  Is it something you view as a part of life, or is it somewhere in the future to get it paid off? If one has it and one doesn’t, will it be paid off jointly?

How do you feel about purchases that you can’t afford? Do you go into debt to get them or do you wait until you can pay for them?

How will your finances be set up? Will everything become joint, or remain separate?

How does each spouses’ salary come into play? If one makes more than the other, does that change the makeup of the financial relationship? Meaning, will that person have more say in financial decisions, or not?

I recently read an interview with Laura Wasser a prominent Divorce Lawyer in the United States who highlighted a couple of good pointers.

“Family. How much time and money are you going to want to spend on existing family? Do we want to start our own?

Hobbies. What about if he is a golfer and he goes on these extremely expensive golf trips and her hobby is painting and she buys a few oil paints every 3 years. I mean, those are the kind of things that need to be discussed.

Travel. I mean, obviously if you guys have been dating for a while, you’re going to know what each of you likes–is he a backpacker? Are you a spa girl? But at the same time, there are plenty of people who say, ‘look, I’m 40 years old, I don’t ever want to fly anything but business class again.’ That should be discussed.

Shopping. I still know women who have been married for years, but when they come home from a shopping trip they hide their bags in the car until their husband has gone out, and then they kind of bring them in piecemeal, and unwrap them and take tags off because they don’t want their husbands to know what they’ve been purchasing. So shopping–what’s the expectation?

Entertaining and Entertainment. If you’re going to have his work people over, your work people over, are you going to cater? Cook? If you have children, what are their birthday parties going to be like? Is he going to be offended if you want to have the birthday party catered or valet parking? And what are the expectations for spending on entertainment outside the home–concerts, movies, theatre, that sort of thing?

Charitable contributions. This is a big one. People like to be able to do what they want to do with their money. Many people have very strong feelings about what kind of charitable contributions they make. It’s important to have a conversation about how much of your income is going be put in there.

Meals. Are you going to cook at home or eat out most nights? If you’re going out, which caliber (and price range) of restaurant? Are you taking packed lunches to work versus doing expensive work lunches or lunches with the girls?

Savings and investments. How much of your income do you want to put away each year? If one person is spending all of their income on clothes, travel, hobbies, and entertaining, and one person is saving it, that may not be quite fair if and when you guys split up, depending on what the law is and what you decided to do.

Estate planning issues. Wills, life insurance policies. This is definitely more a marriage one–something to talk about a little further down the line. Maybe earlier on, you may want to deal with insurance, like auto and health. You don’t want to move in with someone and find out that they don’t have auto or health insurance. That’s a rude awakening.

Gifts. How much are you spending on gifts?

Home décor and home remodelling. Again, what’s the expectation?”

So your advice is taking this list and going through it, just as you would do with a financial planner?

Almost in the same way. Why wouldn’t you have such a conversation with someone you’re sharing your life with instead of with the person who is just getting paid to take care of you?

Why is it so important to have these conversations at the start of a relationship?

You will be amazed sitting from where I sit at the things I hear from people regarding the arguments that they’ve gotten into about finances. Bottom line, these are things that you don’t want to have resentment about later because they haven’t been discussed.

What if the financial circumstances change during the course of the relationship?

You have to constantly re-evaluate your circumstances. Check in either on an annual basis. It’s very interesting to see couples who have been married for a very long time and when and if they split up, one of them would say ‘I just had no idea that the situation was so dire!’ Whether things go up in terms of household economy or down, if you’re in it for the long haul, then you would tighten your belts together, and if things are good, you splurge together. Usually you here the women saying, ‘I’m so embarrassed but you’d have no idea what we spend, I have no idea what my husband makes. I just don’t know. I never worried about it.’ I think if you are going to be in a relationship with someone, you need to be able to share the responsibilities, the knowledge, and the worry. It’s not like it was when our parents or their parents were having lives where the mom worked in the kitchen and the husband worried about it and the wife didn’t know there was any problem. I mean, you should both be aware of what’s going on.

You need to continue to communicate and work together, always remembering you are working towards the same goal. You can do this by:

• Communicating. As soon as you start avoiding talking about money with your spouse, or hiding new purchases then you are going to deviate from the plan, and it will be hard to get back on track.
• Having money discussions. Instead, of ignoring issues with your finances, talk about it with your partner and if something isn’t working, work out why. You’ll then be able to find a solution together, and that is what marriage is all about.
• Monitoring net worth. Your net worth is a good indicator of how well you are sticking to your budgets and financial plans, and as a couple you should revisit your net worth each month to make sure it is going up and not down.
• Revisiting your goals and plans. It is all very well to make plans for the future, but we all know that unexpected events can pop up and change these plans. Therefore, make sure you continue to track your progress towards your goals, and readjust your ideas for the future if necessary.

About Bertus Preller

Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in law and 13 years as a practising attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters and international divorce law.

http://www.divorceattorney.co.za

Free Sample Cohabitation Agreement

Cohabitation  – Living  Together Agreement

The following form is intended for illustrative purposes only. You and your attorney can use this sample as a guide in drafting a cohabitation agreement that best protects your interests and complies with the laws in effect where you live.

Why do I need a Cohabitation Agreement?

A Cohabitation Agreement sets out the financial terms of a couple’s relationship, and provides protection for the parties upon death, or should the relationship fail. 

Who should use a Cohabitation Agreement?

Any unmarried couple in a relationship and living with each other could find this agreement useful.

Also known as:

• Conditions of Cohabitation
• Cohabitation Contract

It is advisable that you contact an attorney in regard to drafting such an agreement.

COHABITATION AGREEMENT

Between

(The 1^st Party)

and

(The 2^nd Party)

PREAMBLE

WHEREAS

1.  The parties are currently living together in a domestic partnership and intend to continue living together in this arrangement;

2.  The parties wish to define their respective proprietary rights and liabilities arising from their domestic partnership arrangement;

3.  The parties each acknowledge that they enter into this agreement voluntarily, without any duress or undue influence, and that each has had the opportunity to consult with an attorney of his/her choice;

THE PARTIES AGREE:

1.         Marital Status

The joint residency of the parties shall in no way render the parties married in any way, whether by operation of common law or any other law.

2.         The Agreement

2.1       This Agreement consists solely of the mutual promises contained herein and the mutual promises of each party to act as the living companion and partner to the other.

2.2       This Agreement fully contemplates and compensates any and all services provided by either party for the benefit of the other during the course of their joint residency. The furnishing of sexual services shall in no way be construed as consideration for this Agreement.

3.         Disclosure of Current Financial Status

Each party has fully and completely, to the best of his/her knowledge, disclosed to the other party his/her current financial condition including all assets and liabilities. Each party has attached a balance sheet to this agreement indicating his/her current assets and liabilities with the understanding that this balance sheet reflects his/her current financial status to the best of his/her ability.

4.         Division of Living Expenses

Necessary and jointly approved living expenses shall be divided between the parties as below:

4.1       The 1^st Party shall contribute _____________ percent ( ____%) per month;

4.2       The 2^nd Party shall contribute _____________ percent ( ____%) per month.

The parties shall contribute their monthly pro rata contributions into the joint savings/current account of the parties. Any property purchased using funds in this account shall be considered to be the joint property of the parties and owned according to the respective party’s percentage of contribution as stated above. Either party may draw upon this checking account.

5.         Separate Property

The following properties shall be kept by the parties as the separate property of the recipient and the said properties shall not be subject to division at the termination of this Agreement:

5.1       All and any property, real or personal, owned by a specific party at the date of execution of this Agreement;

5.2       Individual gifts, bequests or inheritances acquired before or after the execution of this Agreement;

5.3       Individual earnings, salary or wages acquired before or after the execution of this Agreement;

5.4       All income or proceeds derived from the aforementioned properties.

6.         Commingling of Property

All commingled property shall be presumed to be joint property of the parties unless otherwise agreed.

7.         Joint Property

All property acquired by the parties after the date of execution of this Agreement and before the termination of this Agreement and procured jointly with joint resources and funds shall be considered joint property of the parties with each party possessing his/her aforementioned percentage of ownership.

8.         Division of Property upon Termination

Upon termination of this Agreement or termination of the joint residency, all jointly owned property shall be divided among the parties according to their pro rata share listed above.  If the parties are unable to agree on the appropriate division of joint property, they may appoint an independent and mutually agreed upon Third-party to act as Appraiser.  The Appraiser shall divide the property among the parties according to his/her pro rata share.

9.         Duty of Good Faith and Confidentiality

9.1       This Agreement creates a fiduciary relationship between the parties in which each party agrees to act with the utmost of good faith and fair dealing toward the other in the management of their joint property and in all other aspects of this Agreement.

9.2       Without obtaining a parties’ written consent in advance, a party shall not directly or indirectly publish, or cause to be published, any diary, memoir, letter, story, photograph, interview, article, essay, account, or description or depiction of any kind whatsoever, whether fictionalised or not, concerning the relationship or any other aspect of a parties’ personal, business or financial affairs, or assist or provide information to others in connection with the publication or dissemination of any such material or excerpts thereof.

10.       Legal Names of Parties

Each party shall retain his/her legal name, including surname, as printed and signed in this Agreement.

11.       Duration of Agreement

This Agreement shall become effective at the date of execution and shall remain in effect until termination. Termination shall be effected by written notice by either party, cessation of the joint residency by either party or death of either party.  Either party may terminate this Agreement unilaterally at any time.

12.       Death of Party

Upon the death of either party, the surviving party waives all rights to support by the deceased party.

13.       Complete Agreement

It is the intent of the parties that this Agreement be the full and complete agreement between the parties regarding their joint residency.  No variation of this agreement shall be of force or effect unless reduced to writing and signed by both parties.

14.       Severability of Provisions

Should any paragraph or provision of this Agreement be held invalid, void, or otherwise unenforceable, it is the intent of the parties that the remaining portions shall nevertheless continue in full force and effect without impairment.

15.       Governing Law

This Agreement shall be governed by, interpreted and construed in accordance with the laws of the Republic of South Africa.

DATED at                                     this                  day of                                    201_

AS WITNESSES:

 

1.

 

2.

 

DATED at                                     this                  day of                                    201_

AS WITNESSES:

 

1.

 

2.

 

Compiled by:

Bertus Preller

Family Law Attorney

Abrahams and Gross Inc.

Cohabitation Agreements in South Africa

Cohabitation Agreements

None of the consequences of a marriage automatically ensue if partners simply live together. Thus life partners do not automatically have the right to share in the other’s property during or after the relationship. Life partners are able to use contracts to achieve a measure of protection as against each other as well as against third parties. They may for example purchase assets jointly, or jointly enter into lease agreements, credit agreements etc. in such cases the terms of each contract will determine the rights, duties and obligations of each of the life partners. Usually the life partners are the joint owners of the assets acquired and joint debtors in respect of the obligations incurred.

Where the life partners are the joint owners neither of them can exclude the other from using or controlling such assets. Unless they have entered into a partnership agreement either of them may alienate his/her own share of the jointly owned assets without the other’s consent. If the life partnership breaks down and the life partners can’t agree how to divide the assets either of them may institute the action communi dividundo in which event the court will then appoint a receiver or liquidator to divide the assets.

It is best that life partners regulate their rights in terms of a cohabitation agreement. In this agreement they may for example undertake that they will maintain each other while the relationship lasts, agree to posy separation maintenance, regulate ownership of the property each of them owned before the start of the relationship, agree on property acquired after the relationship started, agree on occupation of the common home during the relationship and after termination and so forth.

Partners living together should enter into a cohabitation agreement. I have dealt with numerous disputes over the years where partners terminated a relationship with or without an agreement in place and it is usually where there is no agreement in place that the turmoil starts.

Bertus Preller

Family and Divorce Law Attorney

Abrahams and Gross Inc.