By Siya Makunga
It is quite common for land, together with the buildings on the land, to be the largest asset in a deceased estate. In this article we will discuss the legal principles governing immovable properties registered in the name of the deceased.
An Executor or Representative cannot deal with the immovable property before he or she has been issued with Letters of Executorship or Authority. This means that nobody can sign a sale agreement or transfer documents in respect of an immovable property belonging to the deceased without legal authority. A Power of Attorney to pass Transfer signed by an Executor or Representative before the date that Letters of Executorship or Authority are issued will be deemed null and void.
The Executor or Representative is lawfully authorised to effect transfer of the immovable property to heirs in accordance with the terms of a Will or the laws of intestate succession. The property can either be transferred directly to the heirs, or the property can be sold from the estate and the net profit generated from the sale awarded to the heirs (after payment of any arrears rates, municipal services, bond repayments etc.).
Estates worth more than R250 000
If the value of the estate is more than R250 000, the Executor is obliged to draft a Liquidation and Distribution account (L & D account) to be approved by the Master. The L & D account must lie for inspection at the Master’s office and be advertised in the Government Gazette and local newspaper. If no objection to the account has been lodged or the objections have been dealt with by the Executor, the Master will confirm the L & D account. The Executor will now be able to effect transfer of the immovable property. In terms of section 42(1) of the Administration of Estates Act, an Executor who wishes to transfer immovable property is obliged to lodge with the Master, a conveyancer’s certificate stating that the proposed transfer is in accordance with the Liquidation and Distribution account.
Estates worth less than R250 000
If the value of the Estate is less than R250 000, the appointed Estate Representative has the same duties to ensure that the rightful heirs inherit, and that the property is transferred to them.
However, the Representative is not obliged to draft an L & D account nor to advertise the account unless the Master directs him or her to do so. This means that after the Representative has paid the debts of the estate, transfer of the property can take place. The result is that there is much abuse of power on the part of Estate Reps who incorrectly think that they are being appointed as heir, or who take advantage of their appointment by taking control of the property or trying to sell the property and keep the proceeds of the sale when they are not rightful heirs, or they are one of several heirs.
Municipal rates
Prior to the transfer of the immovable property, the Executor and Representative need to ensure that the municipal rates have been paid up. Section 118(1) of Local Government: Municipal Systems Act 32 of 2000, places a restraint on the transfer of immovable property. The section states that the registrar of deeds may not register a property without production of a rates clearance certificate. This means the Executor or Representative must apply for a rates clearance certificate at the municipality in which the immovable property is situated. When all amounts such as municipal service fees, property rates, levies etc. due in connection with the property are fully paid up, the municipality will issue a certificate which certifies that all municipal debt has been paid. The Executor or Representative has a duty to pay any outstanding municipal debt. The rates clearance certificate is an important document that needs to be lodged at the Deeds Office when bringing an application to transfer immovable of property.
How is immovable property transferred to heirs?
A conveyancing attorney must attend to the transfer of immovable property. The Executor or Representative will sign the Power of Attorney to Pass Transfer. Further, the Executor or representative’s name will appear in the Deed of Transfer. When the immovable property in the estate is transferred to the heirs, the conveyancing attorney must, in addition to the normal transfer documents, also lodge further documents at the Deeds Office proving that the persons to whom the property is being transferred are the rightful heirs.
In our next article we will discuss estate transfer endorsements, the sale of an immovable property and transfer duty.
Siya Makunga is an attorney at the Rhodes University Law Clinic.
