By Siya Makunga
In our previous article we provided the legal principles governing immovable properties registered in the name of the deceased. In this article we will discuss estate transfer endorsements, transfer of immovable property to minors, the sale of an immovable property, and transfer duty.
Estate transfer endorsements
Immovable property of a deceased estate can be transferred by the endorsement of the title deed. We will provide two types of endorsement that can be utilised by the Executor or Master’s Representative.
1. Section 45(1) of the Deeds Registries Act (DRA)
If a surviving spouse who was married in community of property is entitled to lawfully acquire the deceased’s fifty percent share in the immovable property registered at the Deeds Registry, he or she can utilise the section 45(1) endorsement.
The application is for the endorsement of the title deed to the effect that the surviving spouse is entitled to deal with the property as if he or she had taken formal transfer of the half share of the deceased spouse. Instead of transferring the deceased’s half share by Deed of Transfer, which is more expensive and time consuming, the title deed is merely endorsed by the Deeds Office. The effect of the endorsement is that the deceased’s share in the property is formally transferred to the surviving spouse. This means that the surviving spouse acquires full ownership of the immovable property.
2. Section 39(3) of the Administration of Estates Act
Sometimes an heir is unable or could not without hardship pay the transfer costs involved in having any immovable property registered in his or her name. This section states that, in these circumstances, the Master may authorise the Executor or Estate Representative to endorse the title deed to the effect that the property has been bequeathed or inherited by the heir.
This issue is left at the discretion of the Master. The Master’s consent must accompany the application.
The transfer of immovable property to minors
When immovable property is bequeathed to a minor child, he or she can take transfer of the immovable property with the assistance of their legal guardian. A legal guardian may be the natural guardian (i.e., a parent of the minor child) or an appointed guardian (an individual specified in a will or appointed by the courts). Section 18(3)(a) and (b) of the Children’s Act imposes a duty on guardians to administer and safeguard the child’s property and property interests. This means that the legal guardian must sign any documentation that is necessary for transfer of immovable property to take place.
Although the minor child is the registered owner of the immovable property, the legal guardian is responsible for administering the property until the child reaches the age of majority. Should the minor child wish to sell or mortgage the property before turning 18, he or she would need the assistance of the legal guardian to do so. The Master may authorise the sale, disposal or mortgage of immovable property belonging to a minor child, if the immovable property does not exceed R250 000. If the immovable property exceeds R250 000, only the High Court may authorise the above transactions.
The sale of immovable property
Immovable property in an estate can be sold when the heirs agree to do so or where there is insufficient cash in the estate to pay all debts. The profit from the sale of the property will then be utilized to pay outstanding debts, and the balance will be transferred to the heirs. Before any sale of the immovable property, the Master’s Representative must receive direction from the Master (or the Executor must obtain a certificate from the Master) stating that there is no objection to the sale. This means that, following the sale, the immovable property is transferred directly from the deceased estate to the buyer, without an initial transfer to the heirs.
Transfer duty
Transfer duty is tax that is levied against the value of immovable property acquired by a person by way of a transaction. Section 9 of the Transfer Duty Act provides the following exemptions where transfer duty is
not payable:
(i) Where a surviving spouse acquires sole ownership of a property or a portion of the property owned by the deceased, no transfer duty is payable. In other words, when the whole property or a portion is registered in the name of the surviving spouse, he or she shall be exempted from paying transfer duty.
(ii) No transfer duty is payable by an heir or legatee in respect of immovable property acquired in terms of a Will or intestate succession.
NB: Should the heirs elect to not take transfer of the immovable property and the property is sold by the Master’s Representative or Executor, transfer duty is still payable by the buyer.
The amount of the transfer duty is dependent on the value of the immovable property.
Siya Makunga is an attorney at the Rhodes University Law Clinic
