What are the ins-and-outs of buying a property from a deceased estate? We asked Tamaryn Nowitz, an attorney from Alan Levy Attorneys to give us some pointers.
What are the ins-and-outs of buying a property from a deceased estate? We asked Tamaryn Nowitz, an attorney from Alan Levy Attorneys to give us some pointers.
Q - Generally speaking, what do buyers need to know about buying a home from a deceased estate?
A - There are two major areas for a buyer to be aware of when buying from a deceased estate:
- The Voetstoots Clause In a normal sale the transaction is subject to a voetstoots clause. In other words, the seller is selling the property as it stands; a more detailed understanding of this clause reveals that a seller would not be liable to a buyer for patent defects (these are defects which are visible) nor for latent defects (a defect that is hidden and may only become apparent to the buyer much later on).
The only defect that a seller would be liable for is one that is latent - that he had knowledge of and that he failed to disclose to the buyer. In the case of a deceased estate there is no one to disclose to the buyer and therefore the buyer should take much more seriously his duty to inspect the property before making an offer to fully apprise him/herself of the true state of the property as he will not be in a position to come back later and claim any damages from the seller.
- Delays in winding up an estate
Although I do not regard myself as an expert in the administration of estates, I am aware that complications can and do arise that can delay the winding up of an estate. It's worth noting that the estate must be at a certain stage in order for the transfer to proceed.
Q - Does buying property from a deceased estate take longer than an ordinary sale and does the estate have to be completely wound up before a sale can go through?
A -There is no cut and dry answer. One element of an estate transfer that differs from an ordinary sale is that the Power of Attorney to Pass Transfer will have to be endorsed by the Master of the High Court. In order for the Master to be in a position to do this, part of the winding up has to have been completed, but not all. The Estate must at least be at such a point that the Liquidation and Distribution account has been submitted to the Master. Leading up to this point alone can take a few months. Each transfer is different and each estate is different so there is no definitive answer, but in the best case scenario the transfer will take a little longer than an ordinary one; worst case scenario (from personal experience) the delay can be up to a year.
Q- What happens if the person who has died has no living relatives and there isn't a will?
A - This is a difficult scenario to imagine. Even if the person has no spouse or descendants or even ascendants it is unlikely to find that there are no extended relatives, for example a child of an aunt or uncle. Somewhere in the line there must be one living person and such person would then inherit in terms of the law of intestate succession. However, if this unlikely scenario did happen where there were in fact no living relatives, the estate would devolve upon the state.
Q - How can a buyer ascertain which attorney is handling the estate?
A - This could be ascertained from the transferring attorney as such attorney, if not attending to the estate him/herself (which is sometimes the case), would have to be in communication with the estate attorney to proceed with the transfer.”
Q - Would a buyer be held liable for any costs that had been run up while an estate is being wound up (levies, municipal rates etc)?
A - Unless the offer to purchase stipulated that the purchaser was responsible for rates and levies (which is usually not the case) the seller or, in this case the estate, would always be liable for payment of outstanding levies and rates. If the buyer takes early occupation of the property, he/she would be liable for rates and levies (contractual terms to be the guide here) for only his/her period of occupation but the remainder would always be for the account of the seller/estate.”
Q - Is it possible for a buyer to move into such a property before the sale has gone through and if so, who would receive the occupational rent?
A - It can be agreed in the offer to purchase that the buyer is granted early occupation from a certain date at a certain monthly rental. This money may be paid directly to the seller or may be paid to the transferring attorneys who will pay this over to the seller as agreed.”
So there you have it: buying property from a deceased estate might be more complicated, but it's a possibility worth considering if the price is right.