20 Sep What You Need to Know About Purchasing Property from a Deceased Estate
Buying any property already has many terms and conditions, but buying property from a deceased estate can often be even more daunting, especially if you don’t have enough information about the process.
Therefore, we advise before purchasing a property from a deceased estate, you should equip yourself with information on any potential additional requirements needed for the transaction, as well as any possible pitfalls and challenges which may affect and contribute to a lengthy deceased sale transfer.
Inspect the Property
Since the Seller who owned the property is now deceased, it’s often difficult to establish whether the property has any defects. It is therefore utterly important that you, as the potential future owner, inspect the property thoroughly. Ensure that you ask the agent or current occupants about any potential issues, upgrades that were made to the property, and the general condition of the property. You may want to consider obtaining a condition report from a third party specialist to determine whether there are any structural defects.
The Role of the Letter of Authority & Sale Agreement
The Letter of Authority is only issued after the estate has been reported to the Master of the High Court and certain documents have been submitted and accepted by the Master. This can take approximately 8 to 10 weeks after the required documents have been submitted.
Only the executor of the estate, formally appointed by the Master of the High Court, is authorised to issue a mandate to an estate agent to market the property and sign the Sale Agreement. If the contract is signed prior to the issuing of the Letters of Authority, the contract is invalid.
If there is more than one executor, then all the executors must sign the Sale Agreement. Alternatively, a resolution can be executed and signed before the date of signing the Sale Agreement, authorising a representative to sign any transfer documents on behalf of the deceased estate.
If there is more than one owner, it is important that the Sale Agreement should clearly identify the registered owners and note the capacity of the executor.
The Sale Agreement should be subject to the approval of the Master in terms of Section 42(2) of the Administration of Estates Act. It is also a legal requirement that the heirs need to consent to the transfer of the property when the Conveyancer is applying for the consent from the Master to proceed with the transfer. The additional requirement provides protection to the heirs and ensures that the executor is acting in accordance with the intention of the deceased.
Applying for Consent from the Master
As purchaser, you need not apply for Consent yourself, but understanding the process allows potential purchasers to consider all the necessary steps and the time it may take to adhere to all the requirements.
Once the Purchaser’s finances are secured, a formal application for consent is made to the Master of the High Court. The application, together with the following supporting documents, are then submitted to obtain the consent from the Master:
- The Sales Agreement
- Signed Power of Attorney to pass transfer
- The written consent of all heirs who have an interest in the property
Should there be anything outstanding on the deceased estate, the Master may reject the application for the transfer and request the additional documents to be submitted together with the application, which may cause further delays.
Once the Master is satisfied that there are no objections to the sale, the Masters’ consent is stamped (“endorsed”) on the Power of Attorney to pass transfer to the Purchaser.
Further Documents Required
The Conveyancers will in the meantime obtain the following usual transfer documents while awaiting the Masters’ approval:
- The rates clearance certificate
- SARS transfer duty receipt
- Signature of the transfer and bond documents by the purchaser
- If required, a levy and/or Homeowners’ consent
Once the conveyancers have all of the usual transfer documents and the Masters’ approval, they can proceed with lodgement and registration at the relevant Deeds Office.
Time Period of Transfer
A normal transfer usually takes approximately 2 to 3 months, whereas a deceased estate transfer can take approximately 4 to 5 months from date of sale to date of registration, due to the above mentioned additional requirements.
This article and the estimated time frames are provided for information purposes only. Please contact Louw & Coetzee Attorneys at email@example.com / 021 976 3180 should you require specific and detailed legal advice or guidance on your Conveyancing or Estate-related matter.