Deceased developer – response III

This is my response to Deceased developer - response II ("the article"), paragraph by paragraph:-

  1. Since they are not registrable, the units are not "immovable property" as defined in section 1 of the Administration of Estates Act, 1965 (Act 66 of 1965), as amended, ("the AEA"), and cannot be reflected in the liquidation and distribution account in compliance with Regulation 5 (1) (c) (v) of the AEA. It is the registered land that should be reflected. There is no suggestion whatsoever, in Registrars' Conference Resolution No. 83 of 2010 ("the Resolution") or Deceased developer - a response, that the executor will transfer sold units to the heirs.

    If regard is had to (i) his concession that the "question at conference did indeed not mention that any units were sold….", (ii) the fact that no mention at all is made in the Resolution that any units were sold and (iii) the repeal of section 9 of the Sectional Titles Act, 1986 (Act No. 95 of 1986), as amended, ("the STA"), by section 5 of the Sectional Titles Amendment Act, 1997 (Act No. 44 of 1997), there is no valid basis whatsoever for Mr Lee's conclusion, that my statement, "that "…as a general answer to a general question…" assumes that as a general rule schemes are opened at the deeds office and units only sold afterwards." Sub-section (1) of the aforesaid repealed section 9 of the STA provided that: "No developer or other person shall offer or advertise for sale, grant an option for the acquisition of, or sell, any unit or any undivided share in a unit in respect of any building and land, or any interest purporting to be a proposed unit or undivided share in a unit in respect of a building and land, unless a sectional title register has been opened in respect of that building and land."

    The Resolution applies, and is valid, without regard to the bequest or sale of units. I do not agree that "resolutions end up effectively having the effect of legislation." It is implied in every Resolution, for example, that it would succumb to an order of a Court of competent jurisdiction.

    There is no doubt that the question, whether an executor "is acting within the scope of his or her authority", as contemplated in the definition of "owner" in section 1 (1) of the STA, can only be properly answered by reference to the law of the administration of estates, as opposed to conveyancing. Authority for this view is to be found in S v Von Molendorff and Another 1987 (1) SA 135 (T) at page 143, where Ackermann J said: "A number of relevant conclusions emerge from these considerations. They are: 1. ……………….. 2. The judgment in R v Tremearne accepted that if Voet 49.13.2 states the law, then, when it is transposed into the context of the modern law of the administration of estates, it would serve to vest the executor of the deceased appellant with locus standi to prosecute a criminal appeal initiated by the deceased prior to his death, if the requirements noted by Voet are satisfied ……………….." (emphasis added).

  2. Mr Lee's statement that the "executor steps into the shoes of the developer" is refuted by the decision in Van Den Bergh v Coetzee, 2001 (4) SA 93 (T) at page 95, where Shongwe J made it clear that: "In the view of Boshoff JP in the General Electric case, which I also share, the executor does not step into the shoes of the deceased on his death; he does not succeed to the person of the deceased. He is simply required to administer and distribute his estate under the provisions of the Administration of Estates Act 66 of 1965." (emphasis added). It is beyond the scope of this article to discuss the transfer of erven indicated on a general plan.

  3. The application for the opening of the sectional title register ("the application') falls outside of the scope of the authority of an executor. The characterisation of the application, as an administrative act is misleading and cannot bring the application within the ambit of such authority. The application should not be viewed in isolation but as an integral part of a "scheme" and "development scheme", as defined in section 1 (1) of the STA. According to section 1 (1) of the STA, ""development scheme" means a scheme in terms of which a building or buildings……… or are, for the purposes of selling, letting or otherwise dealing therewith, to be divided …………." (emphasis added).

    In Punshi v Greene, NO and Another 1965 (2) SA 498 (N) at p 503, James J said: "The executor has a duty to deal with the estate in accordance with the provisions of the Estate Act and he should liquidate it as soon as possible. If in order to fulfil his duties as speedily and as competently as possible he desires to adopt a course of action in regard to the assets in the estate which is not strictly in accordance with the terms of the will and he obtains the consent of all the persons interested in such a course of action, it seems to me that such consent, if obtained without fraud and seriously entered into, cannot be repudiated. If all the heirs consent to the executor adopting a particular course they contract with him that they will not oppose him if he carries that course out."

  4. Refer to paragraph 1 above.
In the light of the afore-going, I cannot agree that "there can be no other way of dealing with such matters". In my opinion, (a) one way could be settlement, by the executor, of any claims arising from the contracts of sale and (b) another way could be a submission of the application by the executor after he/she has been authorised thereto by (i) the consent of all the heirs, with the concurrence of the Master of the High Court, or (ii) the High Court.

Thabo Nqhome
16 March 2011

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