When a loved one passes away, it's a difficult and emotional time. One of the tasks that often needs to be dealt with is transferring their assets, including immovable property, to the rightful beneficiaries. In South Africa, the process of transferring a deceased estate can be complex, but with proper guidance and understanding of the legal requirements, it can be done smoothly. This blog aims to provide a comprehensive overview of the process of transferring a deceased estate in South Africa with a focus on immovable property.
Throughout a person's life, they will accumulate a variety of assets and obligations. These assets can range from tangible items such as property, vehicles, and furniture to liquid assets like cash. On the other hand, liabilities may include home loans, personal loans, and retail accounts. All these assets and liabilities form the estate of the individual and must be reported to the Master of the High Court in South Africa upon their death. The Master of the High Court will then appoint an Executor to manage the estate and carry out tasks such as collecting assets, paying off debts, and distributing any remaining assets to the heirs.
The distribution of a deceased estate will depend on whether the deceased left behind a valid will or not. If there is a valid will, the assets will be distributed in accordance with its conditions. The will may specify that a particular heir should receive the immovable property or that it should be sold. However, if the individual passed away without a will, the property can be transferred to the intestate heirs if there are sufficient funds in the estate to cover liabilities. Alternatively, the heirs may opt to pay off the liabilities themselves to keep the assets. In this case, the property may also be sold to cover the debts.
When the immovable property is transferred to an heir, the Executor will handle the transfer once the liquidation and distribution account has been approved and any objections have been resolved. The deceased estate will be responsible for the conveyancing costs and obtaining rates and levy certificates, but no transfer duty will be required. The conveyancing attorneys in South Africa will need to verify, under Section 42(1) of the Administration of Deceased Estates Act, that the transfer complies with the approved liquidation and distribution account. The will and liquidation and distribution account, along with other transfer documents, must then be submitted to the Deeds Office for official registration.
The Executor may sell a property in three situations:
The Executor can arrange the sale of the property even before the liquidation and distribution account is available for review. However, only the appointed Executor can sign the sale agreement on behalf of the deceased estate. Any sale agreement signed prior to the Executor's appointment is not valid.
The sale agreement should include a clause stating that the sale is subject to approval by the Master of the High Court and that written consent from all relevant heirs is necessary.
The added requirements for a sale from a deceased estate, such as consent from the heirs and approval from the Master of the High Court, result in longer processing times for both the sale agreement and property transfer. It is crucial to inform potential buyers from the outset that delays may occur during an estate transaction.
Purchasers of estate properties should be aware of the "Voetstoots clause." This clause indicates that the seller is selling the property as is and is not liable for any visible or hidden defects, except for latent defects that the seller was aware of and failed to disclose. In the case of a deceased estate, there is no one to disclose such defects, so the buyer must take extra caution to thoroughly inspect the property before making an offer. The buyer cannot later seek damages from the Executor as the seller.
The purchaser is responsible for paying transfer costs, including standard transfer duty. The estate, on the other hand, covers the expenses for obtaining rates and levy clearance certificates and cancelling any registered bonds on the property.
Managing a deceased estate can be a complicated process and a difficult time for family members. To ease the legal and financial burden, our specialized estate department offers not just estate liquidation but also secure and proper asset transfer to beneficiaries.
Contact us to find out more.
Subscribe to our Newsletter
Estate Agent Training
Bond & Transfer Calculator
Get the latest updates in your email box automatically.