Quick and efficient
Auctions to the rescue when time is of the essence
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