Patience is a virtue | Buying property from a deceased estate
It is not uncommon for an estate agent to be involved in the marketing of a property which is an asset in a deceased person’s estate. But buying from a deceased estate can, at times, discourage an eager property buyer or investor due to the fact that such transfers are likely to take longer to finalise than ‘normal’ sales.
Why does buying from a deceased estate take longer than usual property sale transactions?
Very often, the estate agent receives the instruction to market a property in a deceased estate from the surviving spouse or heirs (who do not wish to take transfer of the property in terms of the will or in terms of the laws of intestate succession).
In this scenario it is important that buyers are advised of the below factors which impact on the time it will take to register transfer of ownership.
- Only the executor, formally appointed by the Master of the High Court is authorised to issue a mandate to an estate agent to market the property. This authorisation is granted by virtue of the issuing of Letters of Executorship by the Master. These Letters are issued only after certain documents have been submitted to the relevant Master’s office. Depending on the Mater’s office involved, it can take anything between 3 weeks to 3 months before these are issued.
Any deed of sale purportedly entered into prior to the formal appointment of an executor, is invalid and cannot be ratified. In other words, if an agreement was entered into prior to the appointment of the executor (by the issuing of the Letters of Executorship), the executor, when eventually appointed, cannot then bestow validity onto the agreement.
It is therefore imperative to ensure that the executor has received the Letters of Executorship before signing any agreement to sell the property. From an estate agent’s perspective, make sure to request Letters of Executorship from the executor to make sure that the seller (ie, the executor as agent of the deceased) is fully authorised to instruct you.
- Once the agreement of sale has been signed, the Master of the High Court must consent to the sale in terms of Section 42(2) of the Administration of Estates Act. The Master’s consent is stamped (“endorsed”) on the Power of Attorney to pass transfer, signed by the executor. The conveyancer will ask the executor to sign a formal application and will submit the application together with all supporting documents to the Master for its consent.
The application includes the requirement that the written consent of all heirs who have an interest in the property, must be obtained.
Obtaining the aforementioned consent from the Master, often takes a while and may postpone registration of transfer with up to three weeks, as the consent is required before the transaction can be lodged in the deeds registry. In addition, other factors – such as when the heirs are abroad – make it time consuming, tricky and often expensive to obtain the necessary documentation that must accompany the application to the Master. Therefore it is important for the executor and estate agent to enquire, early on, whether there are any objections to the sale from the heirs.
It is important to note that this process must still be followed where the property has been sold by the deceased himself or herself during his/her lifetime.