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A Fin24 user was shocked to find out that her husband has bought a car without telling her, especially since they are married in community of property. She writes:
My husband and I are married in community of property. He bought a car without telling me. The car is being financed by a bank.
I have not signed anything nor have I received a call from the dealership or the bank.
My husband told the dealership that he is married in community of property and they said I would need to sign the contract as well.
I have told him to return the car and we are going to try and take it back. In case the dealership refuses to take it back, what recourse action do I have available?
Attorney Nichola Walker Woodard of HWD Attorneys, responds:
In South African law there are three different types of marriages. These are:
- Marriage in community of property;
- Marriage out of community of property with the accrual system; and
- Marriage out of community of property without the accrual system.
According to our law, if spouses do not conclude an antenuptial contract prior to their marriage, they will automatically be married in community of property.
The biggest difference between marriage in community of property and out of community of property (both with and without accrual), is that with an in community of property marriage a joint estate is created wherein both spouses assets and liabilities are combined.
Each spouse is, therefore, entitled to a 50% share in the joint estate upon dissolution.
There are very important considerations to be kept in mind with a marriage in community of property.
Certain legal acts cannot be performed without the consent of both spouses. An example of this would be the alienation of immovable property within the joint estate.
In these circumstances both spouses will need to consent to the sale. If either spouse refuses to consent, the sale will be declared void. Another action which would require the consent of both parties is the entering into of a credit agreement in which the National Credit Act (NCA) applies.
Having regard to the facts at hand it would seem that a bank was used to finance the purchase of the motor vehicle. This would indeed be classified as a credit agreement and would require the consent of both parties.
READ: Best way to approach vehicle finance
If the consent is not forthcoming, the agreement will be void. The sale agreement is theoretically separate from the loan/finance agreement though (unless linked by a condition that the sale is dependent upon obtaining finance) and does not require separate spousal consent per se.
However, these types of sale agreements are often conditional upon finance being obtained. Furthermore, as the dealership is often instrumental in making application for the required finance, it is arguable that as the loan/finance agreement is void, so too is the actual sale agreement.
This would mean in the case at hand that the dealership would be required to take the car back and that all finance that the husband received from the bank would need to be reversed.
Additional important information to note regarding transactions relating to this type of spousal consent is that the Matrimonial Property Act 88 of 1984 does, however, provide for the ratification of certain of these acts done without the consent of both parties.
The entering into a credit agreement is one such act. Therefore, in the case at hand, if the wife had “within a reasonable time” after the purchase of the vehicle, ratified the action then it would be considered valid and binding.
READ: Bonus, blacklisting and antenuptual contracts
Furthermore, when a spouse enters into a transaction with a party without obtaining the necessary spousal consent and the third party did not know and cannot reasonably have known that the transaction was being entered into without the necessary spousal consent, it is deemed that the transaction concerned has been entered into with the consent required.
This was not the case at hand, as the dealership was calling for the consent and the finance house is expected to have known about such required consent.
A final thing to note is that if a spouse knows or ought reasonably to have known that he will probably not obtain the consent required and the joint estate suffers a loss as a result of that transaction, an adjustment shall be effected in favour of the other spouse upon the division of the joint estate on death or divorce.
Disclaimer: The above is based on the information received from you. If our understanding is in any way incorrect, please inform us immediately so that we can make any necessary amendments.
It should be emphasised that due to the limitations of this type of forum, the above is only a general outline of a potentially complex matter. We recommend that you get further advice before taking action.
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