These days, with the rising cost of living in South Africa, we’re all looking for a good deal. Often, deceased estates are an ideal option.
Those of you interested in deceased estates should keep in mind that it can easily be a lengthy and complicated process.
What to Keep in Mind When Buying Property from a Deceased Estate
If you are approached by someone selling a property that is owned by a person who has passed away, please remember the following:
1] You need to deal with the Representative/Executor of the deceased’s estate who has been appointed by the Master of the High Court and who is authorized to act on behalf of the deceased in terms of a Letter of Executorship. If they do not have this “Letter”, they may not sign your sale agreement.
2] The Seller will be referred to as “the Executor in the Estate Late XXXX, acting in terms of letters of Executorship No. xxx/xxx”. If there is also a surviving spouse or any other parties cited on the title deed as registered co-owner then you need to cite that person as well and they must also sign the sale agreement.
3] A special condition is that “It is recorded that the Master of the High Court is required to consent to/approve the sale. Should the Master refuse to approve the sale, this Agreement shall lapse and be of no further force or effect” alternatively one could say that “the Agreement is subject to the Master’s consent”.
4] Generally the Master is happy for properties to be sold as long as the asset is being sold for the correct value and all the heir’s consent. Please make sure, before you sign an offer to purchase that the heirs are “on board” with the transaction as they will have to sign a consent during the process which gets lodged with the Master when we ask him to endorse our Power of Attorney to Pass Transfer. We suggest that a warranty be inserted in the offer to purchase that the heirs have consented to the sale, in writing. The heirs will have been appointed in terms of the will or if there is no will, in terms of the laws of intestate succession.
5] One does not need to wait for the deceased estate to be finally administered and wound up before the property can be sold. If the representative/Executor and heirs are in agreement the property can be sold and transferred as soon as the letters of Authority/Executorship is issued.
6] If you are buying a property from someone who has just inherited it, please ask the following questions:
- Has the property been transferred to the heirs? If it is not, please check with the attorneys handling the administration of the deceased’s estate, and ask when it is going to be transferred into the heir’s name?. An heir will only be “given” the property once the Liquidation and Distribution Account has been approved by the Master and the account has lain open for inspection free of objection for 21 days. We often find heirs get ahead of themselves and the transfer into their name is still months away.
- Has the consent of the heirs been obtained?
- What is the expected date of registration?
- Are there any areas of concern and if yes, what are the issues?
7] A simultaneous transfer from the estate to the heir and from the heir to the buyer is permissible.
8]Estate transfers can take very long to be registered because of delays in obtaining consent from the heirs, the Masters consent and SARS. Please make sure that you are aware of this before you sign the offer to purchase.