Multiple person bond applications

This may come as a surprise to some, but the growing band of buy-to-let investors in South Africa will find that the banks are not averse to multiple person bond applications these days – indeed, they actually encourage this type of bond because it enables them to spread their risk – and if one of the applicants defaults, the others can be made to shoulder his responsibilities.

One of the drawbacks of multiple ownership is that it means that every one of the partners has to sign every one of the documents relating to the property – no matter how trivial these may be. This can be difficult if, like many businessmen, one or more of the owners travel regularly or is stationed overseas from time-to-time.

The obvious solution for an enthusiastic property investor whose income may be seen by the banks as inadequate for the proposed transaction, is to get a well-heeled colleague or family member to sign as surety. Even here, however, we have discovered at our bond origination division, Rawson Finance, that the banks are increasingly likely to insist that the surety signer is also a part owner of the property. It seems, therefore, that part ownership and possibly syndicates are now the way forward for those people to invest, either for their own benefit or to rent out.

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