There are a lot of misconceptions regarding deceased estates; how long it should take, who inherits, who owns the property, applicable costs and fees and especially when it comes to immovable properties in deceased estates.

It is important to note that immovable property is registered in the Deeds Office of South Africa and will remain in a person’s name until such property is transferred to either a purchaser or heir – a property is never automatically transferred or inherited.

A simple deed search can be done to confirm who is the owner(s) of a property.

The most prominent aspect to remember when someone passes away and was the owner of a property or even a share in a property, is that only an appointed Executor can give transfer of a property. If no Executor is appointed, no person is authorised to deal with the property; no valid lease agreements or offers to purchase or any other agreement relating to the property can be concluded until the Executor is appointed.

It often happens that heirs do not report the estate right away or does not include the property as an asset when reporting the estate; when this happens, the property transfer will be delayed until the Executor is appointed or the Letters of Authority / Executorship is amended to include the property. It is imperative to consult with an attorney when a loved one passes away to commence with the administration process and avoid delays.

Immovable property can be inherited in terms of the will of the deceased, the Intestate Succession Act 81 of 1987, a redistribution agreement or in terms of a sale agreement where the property is sold from the estate.

If a person was married IN Community of Property, a surviving spouse does not automatically own the whole of the property; the property still forms part of the communal (or joint) estate and forms part of the administration of the estate. To simplify, one ship, two captains – one cannot function without the other.

INHERITANCE:

If the heirs of the estate wish to inherit the property, the property is distributed by the Executor in terms of the Will or the Intestate Succession Act, the property transfer will be effected once the Liquidation & Distribution Account is inspected and approved by the Master of the High Court.

The process can be lengthy and is influenced by a number of factors; Master of the High Court, cash shortage, indecision, banking institutions, etc.

If the deceased was married in community of property, the half undivided share is transferred by means of and endorsement on the title deed, known as a Section 45 endorsement and in terms of Section 45 of the Administration of Estates Act 66 of 1965. Until such time, the property will vest in the estate (Executor) and will the surviving spouse only own half an undivided share in the property.

SALE FROM DECEASED ESTATE:

If a property is sold from an estate by the heirs, the property transfer can be finalised prior to the finalising of the administration process.

For the transfer to be effected, the Master of the High Court needs to issue a certificate (also known as an endorsement) in terms of section 42(2) of the Administration of Estates Act which certifies that no objection to the sale of the property exists.

One should always determine whether the property forms part of a deceased estate; if an Executor was appointed by the Master of the High Court and whether the property was included on the Inventory when the estate was reported before proceeding with plans to sell a property.

COSTS:

With every transfer from a deceased estate, the following costs will be payable by the estate before transfer can be effected:

  • Municipal Clearance Figures (issued by the relevant municipality)
  • Levy Clearance Figures (issued by the relevant body corporate / home owners association) – if applicable
  • Bond Cancellation Costs – if applicable
  • Transfer Fees (if not sold from the estate)
  • Relevant costs to obtain certificates of compliance to be provided by owner of property
  • Agent’s Commission – if property is sold from the estate
  • Sec42(2) costs

If the estate has a cash shortage, the heirs will be liable for the costs if they wish to inherit the property. Transfer duty is not applicable if a property is transferred to heirs from an estate.

The following costs are payable by the purchaser if the property is sold from an estate:

  • Transfer Costs
  • Bond Registration Costs (if applicable)
  • Transfer duty (if applicable)

It is important to note which certificates of compliance is to be provided by the owner. If the institution from whom the purchaser obtained a bond, requires additional certificates (apart from those the estate must provide), it is important to clarify that it will be for the purchaser’s account.

Apart from the estate administration rigmarole, property transfer from a deceased estate is an intricate process involving heirs, Executors, banking institutions and the Master of the High Court, municipalities, etc. and is it essential to ensure that that the estate was correctly reported and the Executor appointed to avoid delays which could have been prevented. It should also be mentioned that you should not refrain from reporting the estate straight away due to cashflow difficulties, as the process remains the same even if several years pass – the estate and the property will still be part of the estate and will the whole administration process still be applicable at a later stage – and can become more complex if heirs pass away in the meantime.

Contact us TODAY if you have lost a loved one, or simply want to plan for your future by drafting your FREE will.

Selling or Inheriting Immovable Property from a Deceased Estate