Sale of immovable property directly from a deceased estate: Section 42(2) and Section 47 of the Administration of Estates Act 66 of 1965

It has become common practice to sell immovable property directly from a deceased estate, that is of course provided it is not contrary to the wishes of the Testator as per the Last Will and Testament, and provided the beneficiaries are not intent on keeping the immovable property, taking transfer of and/or residing in the said property. Selling an immovable property directly from a deceased estate has become a popular course of action within the deceased estate industry due to the fact that such a sale enables the estate to generate liquidity and thereby facilitates the settlement of estate costs and creditor claims. However, presently our law is unclear on the process to follow in a situation where absolute consensus between the beneficiaries of an estate in which an immovable property is to be sold is absent.

In practice, when an immovable property is sold out of an estate, the same conveyancing process is followed as would otherwise have been the case in a normal transaction between seller and purchaser — with the only difference being that the property is vested in the deceased estate and therefore, the Master of the High Court (hereinafter “the Master”) has the authority to make the final decision in allowing the sale or not. Generally, when dealing with an estate transfer the conveyancing attorneys have to submit a Section 42(2) endorsement application to the Master, in which the Master’s permission with respect to the sale of the property to a third party is sought subject to a few conditions:

  • The sale of the immovable property must be in the interest of the estate;
  • The sale agreement concluded between the Executor/Executrix (on behalf of the estate) and the purchase is valid and not detrimental to the estate in any way; and
  • Each and every beneficiary with a material interest in the estate must give their consent, in writing, to the sale of the property and confirm that they do not have any objections or contentions to the sale.

If the Master is satisfied in terms of the above requirements, he will endorse the Power of Attorney to pass transfer in terms of Section 42(2) of the Administration of Estates Act 66 of 1965 (hereinafter “the Act”), essentially giving his approval and the transfer process can then proceed and the property can be sold. This seems easy and straightforward enough however, in a situation where one of the heirs refuses to consent to the sale, the situation becomes slightly more intricate and the transfer process can be brought to a screeching halt.

In the event of such a situation arising, Section 47 of the Act makes it possible for an Executor/Executrix to approach the Master with a Section 47 application whereby the Master is requested to either dispense with the dissenting heir’s consent, and/or allow the Executor/Executrix to proceed with the sale in lieu of such dissenting heir’s consent.  In recent times however, the Master has been reluctant to exercise his power and make a determination in terms of Section 47 of the Act and has a tendency to refer families implicated in such a dispute to the High Court for a determination to be made by an appropriate forum. This in itself presents another problem in that even if litigation is instituted in the High Court on behalf of the estate, and a substantial amount of money is forked out to facilitate the costs of litigation, the Courts are not prepared to make a determination and substitute the Master’s decision with that of the Court’s — this is evidenced by the findings in the recent cases of Mar-Deon Boerdery CC v Marais N.O and Others [2021] ZAGPPHC and Bester N.O v Master of the High Court and Another [2023] ZAWCHC, in which the Courts were reluctant to substitute the Master’s discretion with that of their own and subsequently referred the applicant’s back to the Master for a decision to be made.

This has the effect of leaving the Executor/Executrix and the heirs who want to sell the property in the exact same position as they started, only now with seemingly no further option to recourse or a potential way forward as neither the Master nor the Courts are prepared to make a decision.

Therefore, it is crucially important if you find yourself in a similar situation, one where you are a beneficiary of an estate and the intention is for the property to be sold, to ensure that there is consensus between each and every beneficiary on the terms and conditions of the sale before a prospective sale agreement is concluded with a third-party purchaser. This caution would go a long way in ensuring that you do not find yourself in a situation as set out above with no way to progress the sale of the property and ultimately, finalise the estate.

This article is only intended to provide insight and a basic understanding of the current difficulties and uncertainties being experienced in the deceased estate industry concerning the sale of immovable property from an estate when dealing with a dissenting heir, and should not be construed as legal advice. Taking cognisance of the contents of this article may however, greatly assist you in being proactive in order to potentially circumvent the possibility of you ever being confronted with a similar situation in the future.

Article by Liam Labuschagne