Quick and ef­fi­cient

Auc­tions to the res­cue when time is of the essence

Finweek English Edition - - Focus On -

AUC­TIONS have al­ways been and are still quite fre­quently used in the case of de­ceased es­tates. Ta­nia Steven-Jen­nings, di­rec­tor at le­gal firm Cliffe Dekker, says auc­tions aren’t only suit­able where es­tates are in­sol­vent but in many other cir­cum­stances where time is of the essence, which is usu­ally the case in the wind­ing up of es­tates.

Steven-Jen­nings says prop­erty will be sold out of an es­tate where the pro­ceeds have been be­queathed to a spe­cific per­son, where the es­tate is in need of cash to meet all its li­a­bil­i­ties or some­times where a prop­erty is not specif­i­cally be­queathed and thus forms part of the en­tire or residue of the es­tate, de­pend­ing on the cir­cum­stances. “In the last men­tioned case the heir/s might pre­fer the cash, or where there’s more than one heir it might be more prac­ti­cal to sell a prop­erty in­stead of trans­fer­ring to mul­ti­ple own­ers.”

Un­less there’s a will­ing buyer wait­ing in the wings, Steven-Jen­nings ad­vises an auc­tion would al­most al­ways be one of the most ef­fi­cient ways to deal with such sales. “Even in a flour­ish­ing prop­erty mar­ket the tra­di­tional way of sell­ing us­ing an es­tate agent is too time con­sum­ing. Not only does the Mas­ter’s Of­fice set time lim­its for the com­ple­tion of the wind­ing-up process but also quite fre­quently sur­viv- ing spouses are left with a rea­son­ably valu­able prop­erty but in­suf­fi­cient cash on hand.

“In such cir­cum­stances a quick sale is nec­es­sary to make money im­me­di­ately avail­able to the sur­viv­ing spouse for his or her daily needs. A sale of prop­erty through auc­tion can be fi­nal within one month af­ter the in­struc­tion to the auc­tion­eer.”

Sec­tion 47 of SA’s Ad­min­is­tra­tion of Es­tates Act pro­vides: “Un­less it is con­trary to the will of the de­ceased, an ex­ecu­tor shall sell prop­erty... in the man­ner and sub­ject to the con­di­tions which the heirs who have an in­ter­est therein ap­prove in writ­ing: Pro­vided that: (a) in the case where an ab­sen­tee, a mi­nor or a per­son un­der cu­ra­tor­ship is heir to the prop­erty; or (b) if the said heirs are un­able to agree on the man­ner and con­di­tions of the sale, the ex­ecu­tor shall sell the prop­erty in such man­ner and sub­ject to such con­di­tions as the Mas­ter may ap­prove.”

Elana le Roux, as­so­ciate at the trusts and es­tates prac­tice at Cliffe Dekker, says where the heirs ap­prove of the sale their re­spec­tive con­sents will there­fore be sub­mit­ted to the Mas­ter’s Of­fice, who has to en­dorse the sale be­fore lodg­ing the trans­fer doc­u­ments at the Deeds Of­fice.

“Ad­ver­tis­ing costs will be the re­spon­si­bil­ity of the es­tate, while the prop­erty trans­fer costs as well as any taxes and com­mis­sion will be payable by the buyer.”

How­ever, Le Roux high­lights there’s an on­go­ing de­bate as to whether a tra­di­tional sale through an es­tate agent or a sale through an auc­tion has more po­ten­tial to se­cure the bet­ter price for the seller. “But when deal­ing with de­ceased es­tates that’s not the only con­sid­er­a­tion and auc­tions are heav­ily re­lied on to achieve quick, ef­fi­cient re­sults.”

A prop­erty sold on auc­tion can be fi­nal in a month. Ta­nia Steven-Jen­nings On­go­ing de­bate over best op­tion. Elana le Roux

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