By Chrisna Strydom (Director l Attorney l Conveyancer l Notary)
When a seller or purchaser dies during the transaction, it can become very complicated. It is important to remember that the sale agreement can remain valid and enforceable. The death of a party will cause delays and it may be difficult to proceed with the transfer, for example where a purchaser has bought a property with a mortgage bond to be registered in the name of the deceased. The bank would probably withdraw the bond. However, if the property was bought by means of a cash transaction, the parties would be obliged to proceed with the transfer, unless the parties agree to cancel the agreement.
When a purchaser dies during the transaction, there are two important factors to be considered:
- The immovable property is an asset in a joint estate; or
- The immovable property is not an asset in a joint estate.
Where the immovable property is an asset in a joint estate and the marriage in community of property has been dissolved by death of one of the spouses before the property is transferred into the spouses’ names, the property will first be transferred to the joint estate. In other words, the estate of the deceased and the surviving spouse. Once the property has been transferred to the joint estate, it may thereafter be transferred to the heir/s. However, if the surviving spouse is entitled to the property, then the property may be transferred to the surviving spouse by means of an endorsement. If the heir/s have entered into a redistribution agreement, the property may also be directly transferred to the chosen heir.
Where the immovable property is not an asset in a joint estate, in other words the person was unmarried or married out of community of property and the property has not yet been transferred to such person, the transfer must first be made in favour of the estate of such person. Thereafter it may be transferred to an heir.
There are various delays that may be caused because of the death of a seller. The seller’s executor now acts on behalf of the estate of the seller and will be required to sign the Power of Attorney to pass transfer to the purchaser. Should the transaction already be in the relevant Deeds Office, the documents must be withdrawn, and the Power of Attorney will be signed by the executor of the estate and will further require an endorsement by the Master of the High Court. The Master’s office will only endorse the Power of Attorney if he/she is satisfied that the requirements have been met, for example, the solvency of the estate.
The sale of a property by an executor after the death of the deceased may only be sold with the consent of the heirs unless the property is sold to cover the debts of the estate and subsequently the consent by the Master’s Office.
To conclude, it is very important to handle a sale involving a deceased estate with care and that all parties involved understand the possible delays that may occur during the transfer process.
