In practice we often come across couples who think they are married out of community of property but upon a closer look and unbeknownst to them, they are in fact married in community of property! This causes great concern for them, as it may bring about unanticipated (and unwanted) consequences to transactions already entered into.
How does this happen? It is not uncommon that it is the result of non-compliance with legal rules relating to the registration of the spouses’ antenuptial agreement. The law requires that such agreement must be signed and attested to by a Notary Public before solemnisation of the marriage and then it must be registered in a deeds registry within three months after signing it. Where no antenuptial agreement was entered into, or the one was entered into without compliance with the aforementioned requirements, the marriage will be deemed to be one in community of property.
Fortunately, this can be remedied. Section 21 of the Matrimonial Property Act 88 of 1984 (‘the Act’) prescribes how marriage partners can effect a formal change in their matrimonial property regime (ie, how they are married). Both spouses must apply to the High Court for an order that their matrimonial property regime be changed. A court may only grant such an order if the court considers that there are ‘sound reasons for the proposed change; sufficient notice has been given to all creditors of the spouses and no other person(s) will be prejudiced by the proposed change’. If the court is so satisfied, it will grant an order to the effect that the spouses’ existing matrimonial property system will no longer apply to their marriage; and, where it relates to change from a marriage in community of property to a marriage out of community of property, it will authorise the parties to enter into a notarial (marriage) contract the provisions of which will regulate their future patrimonial affairs. This is called a Postnuptial Contract.
The guidelines that need to be followed in order to change your matrimonial property system include the following, as outlined in Ex Parte Lourens et Uxor & 4 others 1986 (2) SA 291 (C):
- Sufficient notice has to be given to all creditors, including a notice in the Government Gazette to this effect.
- The financial position of the parties must be established prior to proposed change.
- Sound reasons must be provided to the court for the proposed change.
- The spouses must show that no other party will be prejudiced by the proposed change.
In addition, a draft notarial contract which the parties propose to register must be annexed to the application.
When considering making such an application, spouses need to bear in mind that it involves a high court application together with various formal advertisement, and the costs must be considered. However, depending on the circumstances, it may be more beneficial for both parties.