In the case of joint ownership by multiple parties, what happens if one of the shareholders die?

The long answer

To take the first question, the fact that the five of you are all on the title deed means that you have a joint tenancy. The Gawie le Roux Institute of Law says, “In a joint tenancy, each owner has an equal and undivided interest in the property. Should one owner pass away, their share automatically transfers to the surviving owners, outside of the deceased's estate. This principle is known as the "right of survivorship." 

So, in other words, your deceased sister’s share would pass automatically to the surviving four siblings. This means that she could not leave her share in her will to her children, for instance, or anyone else. 

The second question is more complex. Lizl Budhram, the advice and product strategy manager at Old Mutual Personal Finance, says that as a house cannot be physically divided between siblings who inherit it jointly, the siblings should agree on one of the following options:

• Living in the property together

• Selling the property and splitting the proceeds

• Renting out the property and splitting the income

• Allowing one of the siblings (or two, in the case of you and your brother) to live in the property and pay rent to the other siblings.

Gawie le Roux Institute of Law says that any important decisions about the property, such as selling or making big alterations to it, require all the co-owners to agree to it. So, for example, one of the co-owners cannot decide to sell without the consent of the others.

But as each co-owner has an equal share in the property, the co-owner/s who want to sell can bring a court application to force the sale and bring the co-ownership to an end. This is an old common law remedy, still valid in South African law, known as the actio communi dividundo. 

The court has the power to make a decision that appears to be fair and equitable. It must take into account the value of the property, the wishes of the co-owners and if any hardship will be caused by the partition. So, for example, the question of how long the siblings living on the property have been living there must be considered by the court. Also, if one or more of the siblings is in financial difficulties, the court could order that the property be sold and the proceeds divided amongst the five siblings.

But even if the court decides to grant the sale, the siblings who brought the court action would have to pay a big legal bill. Going to court is never cheap.

So really, the best way forward would be for the five of you to sit down with a trusted person or a mediator, to try and negotiate an agreement. The fact that you and your brother paid off the bond would have to be taken into account in any agreement. There may be options like buying out the other siblings’ shares or agreeing to a time when the property would be sold. 

You can ask for mediation through Legal Aid. There is a mediation clerk’s office at the magistrate’s court. You can go there and explain the problem to the clerk. If mediation is possible, the clerk will help you fill out the application form. Then the clerk will invite you and the opposing parties to a meeting. There the mediation process will be explained and both parties would have to sign an agreement to mediate. The clerk will help you chose a mediator and give a date and time for the mediation and fees according to a fixed tariff will be shared equally and paid. 

At the mediation meeting, each party tells their side of the story and the mediator asks questions and makes suggestions for resolving the situation. 

It is a very much cheaper solution than going to court.

These are the contact details for Legal Aid:

Tel: 0800 110 110 (Monday to Friday 7AM - 7PM) 

Please Call Me: 079 835 7179

Email: communications2@legal-aid.co.za

Wishing you the best,
Athalie