A simple property transaction can become fairly complicated if, for example, the seller dies during the transaction, i.e. prior to transfer of the property to the purchaser having been affected at the Deeds Office.
Sale prior to death
An agreement of sale that was entered into prior to the death of either the seller or the purchaser and in respect of which transfer has not yet taken place, remains valid and enforceable in all respects. However, the death of either party will inevitably cause delays.
In the event of the death of a seller, for example, the transferring attorney/s will have to obtain a ‘Power of Attorney to Pass Transfer’ from the executor of the estate of the seller. However, before that can happen, the executor needs to be formally appointed by the Master of the High Court by virtue of Letters of Executorship. This, unfortunately, can take some time as a number of documents have to be completed and signed by the nominated executor which, together with the original will and copies of various supporting documents, have to be submitted to the Master for due consideration.
This may give rise to frustrating delays in the transfer process that otherwise would have been completed within 2 to 3 months from date of acceptance by the seller of the purchaser’s offer. It also means that had the parties already signed their respective transfer documents at the time of death, all those documents will become obsolete and will have to be replaced by freshly prepared and signed transfer documents that will reflect the demise of the seller and that the estate of the latter is now being represented by the duly appointed executor.
In addition, the ‘Power of Attorney to Pass Transfer’ will have to be endorsed by the Master of the High Court which can cause further delays. The Master will only endorse the said power of attorney in terms of section 42(2) of the Administration of Estates Act once it has satisfied itself that all its documentary requirements have been met.
In the event of the death of the purchaser, on the other hand, it might be entirely impractical to proceed with transfer as, for example, the one who has applied for a mortgage bond in order to finance the transaction is no longer available to comply with the bank’s requirements, thereby rendering the transaction virtually impossible to be proceeded with.
Sale after death
An executor can only sell and transfer immovable property (prior to having acquired the Master’s formal approval of the liquidation and distribution account) with the consent of all the heirs to the deceased estate, unless the property has to be sold in order to settle the debts of such deceased estate.
(Transfer of immovable property to the heirs can only be affected once the liquidation and distribution account has been formally approved by the Master of the High Court and it has lain open for inspection by the public for 21 days at the Master’s Office and the Magistrate’s Office of the district in which the deceased had normally resided, without any objections having been raised against the account.)
In the event of the sale of immovable property by the executor with the consent of all the heirs, an application will have to be submitted to the Master of the High Court for its endorsement of the ‘Power of Attorney to Pass Transfer’ of the property in terms of section 42(2) of the Administration of Estates Act. Such an application is made by the executor by completing form JM33 and annexing thereto all the required documents such as, for example, a copy of the deed of sale and the consents of the respective heirs.
From the above it is quite clear that extreme care should be taken when preparing an offer to purchase immovable property where a deceased estate is involved. The entailing process is to be adequately explained to all the parties to such a sale agreement. In particular they should be alerted to the inevitable delays that will be experienced while the executor and/or the transferring attorney will be complying with the provisions of the Administration of Estates Act and the Deeds Registry Act, respectively.
This article is merely a general information sheet and should not be used or relied on as legal or other professional advice. No liability is accepted for any errors or omissions, nor for any loss or damage arising from reliance upon any information contained herein. Always contact your legal advisor for specific detailed advice or contact us for further assistance.