A decedent’s estate occurs when a person dies and leaves an estate or a will. Such property must then be administered and distributed in accordance with the deceased’s will or, if there is no valid will, in accordance with the Intestate Succession Act (Act 81 of 1987).
Pearl Sheltema, CEO of Fitzanne Estates
The property of the deceased must be reported to the Magistrate of the High Court within 14 days of the date of death. Any person who oversees the decedent’s estate or is in possession of the decedent’s will may give notice of the decedent’s death by filing a completed death notice with the Master.
A Master of the High Court appoints an executor to manage the deceased’s estate when the person dies. The only person legally authorized and entitled to manage the deceased’s estate is the executor. The purpose is to protect the financial interests of the heirs and the orderly winding up of the deceased’s financial affairs.
No one is authorized to represent the deceased’s estate until an executor is named. This means, among other things, that no one has the right to sign documents on the transfer of immovable property that belonged to the deceased, including the contract of sale.
In South Africa, when the registered owner of an immovable property dies, the property must pass to someone else.
Important: All powers of attorney expire automatically upon death, preventing anyone from acting on any of them. This category includes the power of attorney to register the transfer of property.
What happens when the holder of a sectional title mark dies?
When the owner of the property in the section dies and is no longer able to fulfill his duties and responsibilities, ownership of the section remains with the deceased’s estate. An executor of a deceased estate, acting on behalf of that estate, could attend general meetings, participate in discussions and vote on matters as if he or she were the registered owner of the property.
The executor is responsible for fulfilling any obligations that the deceased owner may have had as the owner of the scheme. These commitments may include completing any physical improvements to the property, such as adding a section or redesigning an exclusive use area.
Other responsibilities may include involvement in corporate body decisions, particularly those that may have an impact on unit value, such as voting on a resolution to approve common property improvements or changes to scheme rules.
During this time, the executor will be responsible for any debts the owner may have accrued, including paying any fines or special charges that may have been in effect, as well as the monthly fee.
An interesting point in these conditions is the payment of special fees.
The owner of the property in the section at the time the trustees pass the special levy resolution is responsible for paying that special levy. If the ordinary levies become the duty of the new owner when the property is sold in ordinary circumstances, the special levy remains the duty of the original owner of the deceased estate. This means that the executor is responsible for paying the balance of the special levy from the funds held in the estate unless the new owner signs a written agreement to accept responsibility for any fees from the date of transfer.
To better understand the roles and responsibilities of trustees, Fitzanne Estates strongly recommends that all scheme managers undertake manager training. Scheme Executive Training covers all areas of the Sectional Title Schemes Management Act 8 of 2011, ensuring trustees are up to date with all relevant legislation.
Acquisition of property from the estate of the deceased
Property in a deceased estate often provides good value for money. Buyers who are interested in purchasing a home from a deceased estate should know what to expect as the process can sometimes be long and complicated.
Once the Master of the High Court issues letters of execution, an executor of the deceased’s estate is appointed to manage the estate. The transfer or sale of any property is one of the administrative duties of the executor.
A notice to debtors and creditors must be published in the local newspaper and the Government Gazette in certain types of deceased estates asking them to present their claims to the executor within 30 days of the publication of the notice. To find out if the estate has any property and if it will be sold, those wishing to purchase something from the deceased’s estate can contact the executor. Most real estate agents are also aware of properties that are part of a deceased estate that will come on the market.
In order to protect the interests of the heirs, the property must be sold at fair market value, whether or not an estate agent is involved. The main disadvantage of buying property from a deceased estate is that the buyer must be aware of the formalities that can cause long delays. One such procedural delay is obtaining the master’s consent, which is required to sell any property from the deceased’s estate.
Because no one has the legal authority to act on behalf of the estate before the Master issues letters of executorship, sales of real property in the deceased’s estate are made by the executor only after those letters are issued. An estate agent or auctioneer will be employed by the executor to market and sell the property. The executor can also sell the property on the open market.
After the sale of the property, the signed sales agreement is handed over to the conveyancer who will deal with the transfer of the property. The conveyancer must obtain the consent of all the heirs of the estate and hand it over to the High Court Magistrate along with other supporting documents.
The master will review the documents before deciding on the sale. Unfortunately, the MA does not have a set deadline for issuing consent, which makes it difficult for buyers and sellers. So we want to make sure you are aware of this aspect of purchasing property from an heir’s estate. In addition, it should be noted that after the final approval of the master’s degree, the transfer process will proceed as usual.
Due to the complex nature of purchasing property from a deceased estate, it is strongly recommended that buyers use both an estate agent and a conveyancer. Having a reliable and worthy team on your side makes all the difference.
Transfer of property of the deceased
When the registered owner of real property passes away, the property must be transferred to another person, usually a family member. Usually the property must pass to the heir or beneficiary named in the testator’s will, but in some cases this can also be done under the Intestate Succession Act.
Transferring real estate from a decedent’s estate to an heir or a third-party buyer is a complex process best handled by an attorney experienced in such matters.
Transfer of real property to a beneficiary in the deceased’s estate
An appointed executor is the only person legally authorized by a High Court judge to manage the deceased’s estate. The executor is obliged to arrange the transfer of immovable property in terms of the will of the deceased. If there is no will, the provisions of the Intestate Succession Act 81 of 1987, as amended, will determine to whom the immovable property is to pass.
In these circumstances, no transfer fee is payable. However, the deceased’s estate will bear the costs of the transfer, including costs such as Deeds Office fees. The deceased estate will also bear the cost of obtaining rates and levy certificates valid until the expected registration date. The transfer cannot be completed before the liquidation and distribution accounts are made available to the general public for inspection.
The conveyancer making the transfer will be required to certify in accordance with section 42 (1) of the Estates Administration Act 66 of 1965 as amended (the Estates Administration Act) that the transfer is made under a liquidation and distribution account. The liquidation and distribution account must first be approved by a Master of the High Court and laid out for inspection.
Sale by executor to third party buyer
If the beneficiaries agree, the executor of the decedent’s estate can sell the real estate to a third-party buyer directly. The offer to buy/sell must be signed by the executor on behalf of the deceased estate and the executor must also sign the transfer documents in due course.
According to section 13 (1) of the Administration of Estates Act, a person who has not received letters of execution is not allowed to sign the agreement. Before an executor signs any offer of sale, an executor must be appointed in writing under section 2(1) of the Alienation of Land Act 68 of 1981 as amended.
To certify that the master has no objection to the said transfer, the conveyancer must obtain a certificate under section 42(2) of the Administration of Estates Act from the High Court where the estate was claimed.
The buyer is usually responsible for paying transfer costs, including transfer duty. The cost of obtaining rates and foreclosure certificates valid prior to registration, as well as canceling any bonds that have been registered against the property, will be borne by the estate.
What happens to the tenant when the landlord dies?
Tenants usually do not have to leave after the death of the landlord because the leases usually continue after the landlord’s death.
After paying the executors of the estate, the landlord’s executor takes over the administration of the estate and passes the “remainder” to the heirs. Through this process, the tenant’s rights and obligations will also pass to the heirs.
Although rare, the lease may expressly state that the lease ends upon the lessor’s death. In this case, the tenant will, at a minimum, need to be given a reasonable amount of time to vacate the property.
At best, if the property has also passed to the heirs, they should leave the lease on its own. If they decide to terminate the lease with the tenant, it must be done within a reasonable time to release, as well as possible provisions provided for compensation for damages, in other words, the tenants can make claims to the heirs for early termination of the lease. .
More often than not, however, the heirs will simply “inherit” the lease as it stands and become the successors of the deceased landlord, meaning there will be no immediate change for the tenant.
And even if the heirs decide to sell the property, the new owners generally have to leave the existing lease before they can ask the tenant to leave or negotiate new terms.
While the property is still in the clearance stage, the monthly rent must be paid to the executor of the property.
As seen above, the executor of the decedent’s estate is the only person authorized by law to transfer real estate on behalf of the decedent’s estate.
The executor is also responsible for fulfilling the duties and responsibilities assigned to him. It is always advisable for a solicitor to be instructed to assist in the administration of the deceased’s estate and for a conveyancer to be instructed in good time to assist in any transfer of real estate.
The Master of the High Court has offices in all major cities in South Africa. High Court Magistrate Hotline: +27(0)123151207 or email az.vog.ecitsuj@retsamfeihc.