It is a cause for celebration when you acquire a property with a business partner or family member and you see both of your names on that title deed. But the real question is - what happens when your visions no longer align on how to deal with the property? From one person wanting to sell the property, to another wanting to rent it out, to yet another wishing to retain ownership, problems naturally arise when co-owners no longer see eye to eye.

Ever so often this question cannot be answered without the court’s intervention if the parties attempts at resolution fail. In the case of Matadin v Parma and Others (4638/2009) [2010] ZAKZPHC 18 (7 May 2010), where a co-owner, Matadin, had to resort to seek the court’s intervention to direct the parties to sell the property as he could not reach an agreement as to how to deal with the property with the heirs of his now late co-owner’s deceased estate.

The age-old principle of actio communi dividundo (in other words, “the judicial partition of co-owned property”) was invoked by Matadin. Simply put, this principle holds that every co-owner may insist on a partition of the property unless there is an agreement not to do so within a certain period which was initially agreed between the parties.

The court reiterated in the Matadin matter that no co-owner is obliged to remain as such against their will. This reasoning applies as long as they are seeking the division of the joint property, regardless of whether the co-owners are business partners. The courts exercise a wide and equitable discretion to decide on the division method. In the case of Matadin, the court ordered the sale of the property.

In the case of Austin and another v Austin and another [2022] JOL 53505 (WCC), four brothers inherited a house and several rental flatlets from their late mother. By virtue of their inheritance,  they had become not only co-owners of these properties but by extension, business partners. These brothers no longer wished to be co-owners due to their inability to agree on how to deal with the property and the financial burden their inheritance was imposing on them.

The court noted that each co-owner is entitled to terminate co-ownership of the property based on the principle of actio communi dividundo. The burden of proof rests on the co-owners claiming termination – they must prove the existence of joint ownership, refusal by the other co-owner to agree to termination, and the facts of the matter in order for the court to exercise its discretion.

Generally, the courts will follow a fair and equitable method and consider the circumstances and preferences of the parties. Orders may include awarding the property to one owner with compensation to be paid to the other/s or auctioning the property and dividing the proceeds amongst them. The court can even appoint a liquidator to sell the assets and divide the proceeds.

It is a given that such disputes are usually accompanied with great emotion as co-owners go from being almost familial business partners or family members to being opponents in a tug-of-war. In these circumstances, the courts usually try step in and make an order for the greater good of all parties concerned, especially considering the close relationships of the parties.