In South Africa, where the traditions of lobola negotiations hold significant cultural weight, many couples embark on the journey of marriage without a full understanding of how being married in community of property can affect their current and future homeownership.
Hopewell Sathekge, director at STBB Attorneys, shed light on this critical intersection of culture and legal reality, assisting people to understand the implications of lobola on property ownership in South Africa.
Sathekge said the conclusion of lobola negotiations not only signifies a union between two families but also marks the legal beginning of the couple’s life together under the Recognition of Customary Marriages Act (1998).
This law grants couples in customary marriages the same legal standing as those who marry civilly.
“Lobola is widely practised, and each culture has its own set of rules and practices,” Sathekge explained, portraying the diverse customs encompassed within South Africa’s rich cultural tapestry.
Sathekge pointed out that once lobola negotiations are completed, couples automatically enter into a marriage in community of property unless they have specified otherwise in an antenuptial contract.
“This means that all assets — including homes and vehicles — and liabilities, such as debts, are shared jointly,” he said, which can significantly affect couples’ approach homeownership in South Africa.
Key factors for home purchase
Gavin Lomberg, CEO of ooba Home Loans, shed light on the necessity of understanding how marriage contracts influence financial arrangements for home loans.
“Both parties must apply jointly for the mortgage, regardless of whether they are first-time buyers or experienced homeowners,” he explained, noting that both names will appear on the property title.
Lomberg said this legal framework entails a series of responsibilities that couples must mindfully navigate. Without a thorough understanding of their financial landscape and planning, they could encounter obstacles on their path to property ownership.
“The pre-approval of a home loan is crucial in this context,” he added.
Securing pre-approval involves evaluating both spouses’ credit scores and overall affordability to ascertain their eligibility for a joint home loan.
Lomberg also clarified that a credit score of 610 or higher is typically necessary.
“Your credit score informs banks about your repayment behaviour, which is key for home loan approval,” he stated.
For couples struggling to meet this benchmark, strategies for improvement can include regular debt repayment and periodic checks of their credit status.
Interestingly, having a joint loan may enhance a couple’s borrowing capacity, as combined incomes often equate to higher lending limits and improved chances of loan approval. “Banks usually prefer lending to two parties due to the shared financial responsibility,” Lomberg said.
However, challenges can arise if one partner has a low credit score, which could hinder their ability to secure the loan.
Divorce or death: what happens then?
The unfortunate scenarios of divorce or a spouse’s passing can complicate property division significantly.
“In a community of property marriage, assets are to be divided equally,” noted Sathekge, a principle that holds for customary marriages even if they are not formally documented.
Those contemplating divorce will need to seek courted assistance for asset division, requiring affidavits to substantiate their marital status.
When is the right time to purchase a home?
Given the multitude of factors at play, couples often grapple with the decision of whether to buy property before or after engaging in lobola negotiations.
“There is no right or wrong answer; it simply depends on personal preference,” asserted Sathekge.
Some couples may wish to demonstrate financial readiness through homeownership before formalizing their marriage, while others might prefer to invest jointly once their marital journey begins.
The Star