FILTERS:

Capacity to sell

1 March 2012

Section 18(3) of the Administration of Estates Act, 66 of 1965, (the Act) provides that where the value of an estate is below R125 000 “the Master may dispense with the appointment of an executor and give directives as to the manner in which any such estate shall be liquidated and distributed.”

The aforesaid, “give directions” and “liquidate” requires further discussion. The letters of authorization issued by the Master authorizes or directs the appointee (Masters Representative) to “take control of the assets, pay the debts and then transfer the residue of the estate to the heir/heirs entitled thereto by law.” It is clear that the aforesaid does not mandate the Masters Representative to sell any property, let alone immovable property. Liquidate can also not encompass sale as the interpretation given thereto in the case of Cradocks Estate v Cradock and Others 1951 NPD 51, namely: 

“Speaking generally, he must liquidate the estate, pay the claims of creditors and distribute the balance among those who are entitled to it in terms of the will or ab intestate. But “liquidate” does not mean “realize”, but reduce into possession.”

speaks for itself.

From the above it is abundantly clear that the Masters Representative does not have the capacity to sell property of an estate he/she is administering. Section 47 of the Act entrusts only an executor with the authority to sell immovable property and provides specifically for the instances where minors, persons under curatorship, etc are involved.

Although it is clear that section 18(3) does not entrust a Masters Representative to sell property, it has become practice that where the Masters Representative wishes to (needs to) sell the property after having received his/her letter of authority from the Master, he/she will have to obtain a further directive from the Master which authorizes the sale of the property.

The application to the Master will follow the same format as an application for a section 42(2) application. The same form can also be used (the reference to section 42(2) can merely be changed to section 18(3)). If the purchase price (together with the value of the other assets in the estate) is less than R125 000, the Master should authorize the sale in terms of section 18(3) as part of the directions which the Master gives.

If the purchase price is in excess of R125 000, the Master must withdraw the letter of authority in terms of section 18(3) and issue letters of executorship, in which case the sale will require the Master’s endorsement in terms of section 42(2).

It is important to note that the Master does not need to issue a section 18(3) endorsement where the fixed property is not sold out of the estate, but is being transferred to the heirs. The reason for this is that the letter of appointment (J.170) already authorizes the appointee to transfer the immovable property to the heir/heirs entitled thereto.

The above practice has also been confirmed in a Chief Masters Directive No. 4 of 2009 which inter alia reads as follows:

Sale of immovable assets in a Section 18(3) estate

Masters and the Deeds Office are in agreement that the general letter of authority issued by the Master in terms of section 18(3) does not authorize the Master’s Representative to sell immovable property.

Therefore, where the Master’s Representative wants (needs) to sell the property after having received his/her letter of authority, he/she will have to obtain a further direction from the Master which authorizes the sale of the property (see Registrars’ Conference Resolutions of 2008, Resolution 46 of 2008).

The application to the Master and the endorsement will follow the same format as an application for a section 42(2) application. The same form and endorsement must be used – the reference to section 42(2) must merely be changed to section 18(3).

If the purchase price together with the value of the other assets in the estate) is less than R125 000, the Master should authorize the sale in terms of section 18(3) as part of the directions which the Master gives. If the purchase price is in excess of R125 000, the Master must withdraw the letter of authority in terms of section 1893) and issue letters of executorship, in which case the sale will require the Master’s endorsement in terms of section 42(2).

It is important to note that the Master does not need to issue a section 18(3) endorsement where the fixed property is not sold out of the estate, but is being transferred to the heirs. The reason for this is that the letter of appointment (J.170) already authorizes the appointee to transfer the immovable property to the heir/heirs entitled thereto.”

Conclusion
The Master, as too the registrar of deeds, is a creature of Statute and derives his/her powers from the Act, in this case the Administration of Estates Act, and cannot usurp more powers than that which is conferred upon him/her in terms of the Act. It is submitted that the Master is acting ultra vires the provisions of the Act and thereby also contravening the provisions of section 14 of the Deeds Registries Act 47 of 1937.

Allen West 
Deeds Training 
Pretoria

Reader Comments: 1
J Meuwesen 12/02/2015:

If directed by the Will to sell the estates assets, does the executor still need to apply section 47 of the Act?

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