Co-ownership arrangements, whether between siblings, friends, or business partners, typically start with goodwill and shared purpose. They often end with a legal problem that nobody anticipated when the offer to purchase was signed. The moment one co-owner wants to exit the arrangement before both parties are ready to sell, the complexity of joint property ownership becomes very real very quickly.
This is a situation Morné Prinsloo, Residential Property Specialist RE/MAX Town and Country Roodepoort & Krugersdorp. encounters regularly in the West Rand market, and it is one that most buyers do not think through carefully enough when they are excited about getting into the property market together.
The Legal Framework of Co-Ownership in South Africa
Prinsloo says in South African property law, most co-owners hold property as tenants in common, meaning each person owns an undivided share in the entire property. The shares can be equal or unequal depending on what was agreed, but no specific physical portion of the property is allocated to any single co-owner. Each co-owner has the right to use and occupy the entire property regardless of their ownership percentage.
Co-owners who have a home loan are jointly and severally liable for the full outstanding bond amount. The bank does not distinguish between the parties when collecting repayments. If one co-owner stops paying their share, the bank can and will pursue the other for the entire outstanding instalment. Both credit records are affected by any default.
The Exit Options When One Party Wants Out
He explans that when one co-owner wants to leave the arrangement, there are three practical pathways. Each has its own complexity and cost.
The first option is that the remaining co-owner buys out the departing co-owner's share and takes over the full bond. This requires a formal transfer of the departing owner's share to the remaining owner, handled by a conveyancing attorney. It also requires the remaining owner to apply to the bank for a substitution of debtor, formally documented as a Section 57 process, which removes the departing co-owner from the bond. The bank will conduct a full new credit assessment and affordability evaluation of the remaining owner before approving the substitution. If the remaining owner does not qualify to service the full bond alone, the bank will decline the substitution and this option falls away.
The second option is that the property is sold entirely and both parties exit the arrangement together. The proceeds are divided according to the ownership shares and each party's financial contribution, which is where a well-drafted co-ownership agreement is invaluable. Without a documented record of who paid what, disputes about the division of proceeds can be as contentious as the exit itself.
The third option, and the most costly and adversarial, is a court application under the actio communi dividundo, the common law remedy that allows a co-owner to apply to court for a forced division or sale of jointly owned property. South African courts have confirmed this remedy is still valid and enforceable, as recently as March 2026. A court will consider the value of the property, the wishes of all co-owners, and whether any hardship will result from forcing the sale. This route should be a last resort, but it is available when co-owners cannot reach agreement and one party is effectively being held in an arrangement they no longer want to be part of.
The Right of First Refusal
"A well-drafted co-ownership agreement, which I recommend as a non-negotiable requirement for every joint purchase I am involved in, should include a right of first refusal clause. This gives the remaining co-owner the first opportunity to buy out the departing co-owner's share at a market-related price before the departing party can offer their share to a third party. This clause is simple to include before transfer and prevents the scenario where a co-owner suddenly finds themselves sharing a property with a stranger," he says.
What to tell Every Joint Buyer Before They Sign
"The enthusiasm of joint buyers at the offer stage is usually matched by a lack of thought about how the arrangement ends. I always raise the exit question directly before any OTP is signed. What happens if one of you wants to leave in two years? What if one loses their job? What if the relationship changes?
"These questions are not comfortable, but they are essential. A co-ownership agreement that anticipates these scenarios does not prevent them from happening. It prevents them from becoming expensive legal battles when they do," Prinsloo says.
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