If you are looking to transfer property to a minor child, it’s important to be informed about the challenges you might face should you want to sell the property after it has been transferred to the child.
A minor who is between the age of 7 and 18 can sign a contract with the help of their parents or guardians.
Many parents choose to give their child a head start by transferring a property into their name.
There are also additional financial advantages when you transfer property to a minor child and these include:
As family matters go, something might happen that will cause you to change your mind about the property that you have transferred into your child’s name.
However, there are some serious legal hurdles that you will need to jump in order to sell or reclaim ownership of the property.
Once the property is registered in your child’s name, you will need to provide the High Court with a substantial reason for wanting to sell the property.
You will need the permission of the Master of the High Court to proceed with the sale and if the property value exceeds R100 000, you will need permission from the High Court itself.
This is because the Hight Court is there to protect the rights of minor children and any decision made by the Court will be in the best interest of the minor.
Additionally, the process of applying to the High Court can be costly and time consuming as you will have to provide answers as to why you are wanting to sell the property.
Furthermore, you will have to prove that the sale of the property will be in the best interest of your child.
The Hight Court will also expect you to provide details of how the profits made from the sale will be invested and how this is in the best interest of your child.
Should you decide that it will not be reinvested in property, the profit will be paid into the Guardians fund to be kept and administered on behalf of the child.
Only exceptional circumstances will motivate the court to rule that the funds do not have to be held in the Guardian’s fund.
When you transfer property to a minor, you and the child can benefit financially. However, due to the legal implications that come with wanting to sell the property after the transfer has been officialised, it’s best to consult one of our property attorneys.
The Administration of Estates Act governs the process of selling property that has already been transferred to a minor.
For professional, legal assistance with this process, please feel free to contact our property attorneys in Cape Town and Johannesburg today.
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