With the rising cost of living and the declining economy everybody is on the lookout for a bargain. Property in an estate could indeed sometimes offer good value for money. One often finds a situation where, although there are substantial assets in an estate, a shortage of cash develops owing to poor estate planning or very high medical costs before the death of the deceased. In such cases it might in some cases become necessary to sell some of the properties in order to supplement this shortage.
Normally this has to be done fairly urgently because the Master of the Suppreme Court and the heirs could put considerable pressure on the executor to finalise the estate and limit costs.
However, keep the following in mind if you are thinking about buying property from a deceased estate:
Only the executor of the estate has the power to enter into a contract of purchase. It takes on average between 2 and 6 weeks for the Master to appoint an executor, but in extreme cases it could take months. Any contract entered into before such appointment will be null and void.
When an estate property is sold, it is ALWAYS subject to the consent of the heirs and the approval of the Master of the Suppreme Court. Although it is a mere formality in most cases, it could develop into a problem, especially where the individual heirs are at loggerheads.
The Master’s consent could also cause moderate delays in the process and the time periods within which consents are given are unpredictable.
- Condition of the property
From the nature of things there is a good chance that the estate will be in a fair state of neglect, especially where the deceased was advanced in years or ill during the last few months of his life.
If the property has latent defects that only come to light after a year or so, you will have no recourse if the estate has already been finalised. It is therefore very important for the contract to be drawn up in such a way that it protects your interests. It is definitely worth its while to get legal help even if it costs a few extra rands.
The contract should contain at least the following provisions:
- It should be SUBJECT to the consent of the Master and the heirs being obtained, coupled with reasonable time periods.
- The seller must supply a guarantee that the building plans reflect all buildings. It would also be a good idea to add a condition to the contract that a full inspection should be carried out by professiobal building inspectors to identify and address latent defects.
- Electrical certificates of compliance, gas certificates and beetle certificatres must be provided.
- It must be possible to take unimpeded occupation and ownership upon registration.
Source: Rauch Gertenbach Prokureurs