Fundamentals of Buying and Selling Property From Deceased Estates in South Africa

When someone dies, their assets and liabilities fall into a deceased estate that must be wound up under the supervision of the Master of the High Court. One of the most valuable—and emotionally charged—assets in any estate is fixed property. Whether you are an executor looking to sell a house to raise liquidity, an heir deciding whether to buy out your siblings’ shares, or an investor hunting for opportunities, understanding the mechanics of buying and selling property from deceased estates is essential.

Deceased Estates 101

A deceased estate comes into being the moment a person dies. All their assets (property, cars, investments) and liabilities (bond debt, rates in arrears) are frozen and can be dealt with only by an executor who is formally appointed via Letters of Executorship issued by the Master. The executor’s mandate is to:

1. Identify and secure the assets
2. Advertise for creditors and settle valid claims
3. Pay estate duty, capital-gains tax, rates and transfer costs
4. Distribute the balance to heirs in terms of the Will (or the Intestate Succession Act if no Will exists)

Real property cannot be transferred before the Master approves the Liquidation and Distribution Account (L&D) and the advertised inspection period has run without objection. These checks and balances protect creditors and heirs, but they also mean that buying and selling property from an estate takes longer than a standard conveyancing deal.

Why Buy or Sell Property Out of a Deceased Estate?

For the Estate (Seller Side)

• Liquidity: Estates may face executor’s fees, SARS assessments and funeral costs but hold little cash. Selling property releases funds to settle debts and distribute inheritances.
• Indivisible asset: If three heirs inherit one house, a sale avoids co-ownership disputes.
• Over-indebted property: If the deceased’s bond exceeds the estate’s cash, selling prevents foreclosure and interest accumulation.

For Buyers

• Potential value: Executors often price to achieve a fair, quick sale, not top market value, so buyers may secure a property below comparable sales.
• Clear title: Because the executor and conveyancer must satisfy the Master’s Office, historic title defects, outstanding rates and compliance certificates are usually resolved before buying and selling property can proceed.
• Longer lead time: Savvy purchasers willing to wait out the estate-administration process can negotiate favourable terms with less competition.

The Intricacies of Buying and Selling Property From Estates

Step 1: Executor’s Authority

No heir, family member or agent can sign a valid Offer to Purchase until the Master has issued Letters of Executorship. If a property is marketed too early, any “offer” signed by the family is null and void.

Step 2: Valuation and Mandate

Executors must obtain a market valuation to guard against selling at an undervalued amount. In practice, two independent estate-agent valuations (or a sworn appraiser’s report) are attached to the L&D account. Once the valuation is in hand, the executor signs a sole mandate or open mandate with an estate agent.

Step 3: Offer to Purchase (OTP)

The OTP must be in writing, signed by the executor and the buyer, and include:

• “Subject to the Master’s consent” clause
• Occupation date (often “on registration”)
• Provision for payment of occupational rent if the buyer takes occupation earlier
• The condition to buying and selling property, is that the sale is void if the heirs successfully object during the inspection period

Step 4: Master’s Approval

After the OTP is accepted, the executor submits the signed agreement plus motivations to the Master for Section 42(2) endorsement (if the heir is buying) or to prove it is a bona fide arm’s-length deal (if the buyer is unrelated). The Master may request higher offers if the price seems low.

Step 5: Conveyancing Process

A specialist conveyancer:

• Obtains a rates clearance certificate and levy clearance (for sectional title)
• Requests the bondholder’s consent to cancellation and settlement figures (if bonded)
• Ensures electrical, gas and beetle certificates are issued
• Drafts transfer documents and lodges them in the Deeds Office

Expect eight to twelve weeks for registration after Master’s endorsement and SARS clearance.

Pitfalls and Practical Pointers

1. Inter-heir purchase: When one heir wants to buy out others, the price must be fair market value; otherwise, SARS could treat the difference as a donation, triggering donations tax.
2. Bonded property: Interest keeps running on a home loan until transfer; estates that drag on for years can see equity eroded. Executors should negotiate interest relief or settle bonds promptly.
3. Occupational rent disputes: If a beneficiary is living in the house, agree on rent to the estate to avoid claw-back arguments among heirs.
4. Lapsed compliance certificates: If electricity or water installations need repair, cost the work in the sale negotiations to avoid surprises.
5. Heirs under curatorship or minor: Sales involving legally incapacitated heirs require High Court approval, adding months of delay.

Estate-Planning Tips to Simplify Future Property Sales

• Liquidity planning: Life insurance payable to your estate can cover debts so the executor is not forced to sell the family home.
• Clear Will instructions: State whether the property must be sold or may be transferred to a specific heir at market value, payable from their share.
• Alternative structures: Holding investment property in an inter vivos trust keeps it outside the deceased estate, allowing trustees to transact without Master-Office delays.
• Up-to-date compliance: Keep building plans approved and compliance certificates current to streamline post-death transfer.

Conclusion

Buying and selling property out of a deceased estate is perfectly feasible, and often beneficial for both executors and purchasers, provided everyone understands the extra layers of regulation, Master-Office oversight, and family dynamics involved. By appointing seasoned fiduciary professionals like Crest Trust and engaging an experienced conveyancer early, you can navigate valuations, Master’s approvals, and SARS clearances with minimal stress. Whether you’re an heir, executor or investor, proactive planning is your key to unlocking value from estate property without unnecessary delays or disputes.

FAQs

Can you sell a house from a deceased estate?

Yes. Once Letters of Executorship are issued, the executor may market and sell property, subject to Master’s approval and provided the sale price covers estate debts and treats heirs equitably.

Can an executor purchase estate property?

An executor may buy estate property, but the Master must consent in writing under Section 47 of the Administration of Estates Act to avoid a conflict of interest. Heirs must also approve.

What happens if the value of the deceased’s estate is above R250,000?

If the gross estate exceeds R250,000, the Master issues Letters of Executorship (not Letters of Authority), and a formally appointed executor must lodge a Liquidation & Distribution Account for inspection. Estates under R250 000 can be wound up under a shorter “Section 18(3)” process.

How long does it take to transfer property from a deceased estate?

On average, 6–12 months from the date of death, longer if heirs object, compliance certificates are missing, or the Master queries the sale. Efficient estates with cash for rates, taxes, and bond settlement can register in roughly four to six months after an OTP is signed.