Key takeaways
- Estate assets can be sold only under the Master's authority: by the executor named in letters of executorship, by the holder of letters of authority in an estate of R250,000 or less (section 18(3), Administration of Estates Act), or, for movable assets before letters are issued, by an interim curator the Master has specially authorised.
- Unless the will provides otherwise, the executor must sell in the manner and on the conditions the heirs approve in writing; where an heir is a minor, an absentee or under curatorship, or the heirs cannot agree, the Master approves instead.
- Auction suits estates because it produces an open, advertised, competitive price on a fixed date, above a reserve the heirs agreed, with a paper trail an executor can put in front of the heirs, the creditors and the Master.
- With us, property typically runs three to four weeks from signed mandate to auction day. Transfer also needs the Master's certificate that there is no objection to it, so allow longer than for an ordinary sale.
- The net proceeds go into the estate's own bank account and reach the heirs only through the liquidation and distribution account, after it has lain open for inspection for at least 21 days (section 35, Administration of Estates Act).
Who can sell estate property, and from when
When someone dies, their estate is frozen. Nobody may draw money from the deceased's accounts or deal with the assets without the authority of the Master of the High Court. If the deceased was married in community of property, the whole joint estate is frozen, not only the deceased's half, so involve the surviving spouse in any decision to sell.
The authority to sell comes from the Master, usually in one of two forms:
- Letters of executorship. The Administration of Estates Act says no one may liquidate or distribute a deceased estate except under letters of executorship or a direction by the Master. Until the letters are issued, the person named as executor in the will has no authority to sign a mandate to sell.
- Letters of authority. Where the estate is worth R250,000 or less, the Master may dispense with an executor (section 18(3)) and give directions on how the estate is to be wound up. Whoever holds those letters works within the Master's directions, so read them before agreeing to a sale.
Before the letters arrive, whoever has the deceased's property must keep it. The Act allows narrow exceptions: paying for a suitable funeral, providing for the family's subsistence, and keeping property safe. If something cannot wait, the Master can appoint an interim curator, who may sell movable property if the Master specially authorises it. A house waits for the letters.
We ask to see the letters before we market anything: on our estates desk, the real constraint is usually the paperwork, not the auction.
Whose approval you need: the will, the heirs or the Master
Section 47 of the Administration of Estates Act says that, unless it is contrary to the will, an executor must sell estate property in the manner and on the conditions that the heirs with an interest in it approve in writing.
| Situation | Who approves how the property is sold |
|---|---|
| The will deals with how property is to be sold | Follow the will |
| The heirs with an interest agree, and none is a minor, an absentee or under curatorship | The heirs, in writing |
| An heir to the property is a minor, an absentee or under curatorship | The Master |
| The heirs cannot agree | The Master |
| Estate of R250,000 or less, under letters of authority | Act within the Master's directions (section 18(3)) |
| The estate cannot pay its debts | Creditors are told the manner and conditions of sale at least 14 days ahead; if one objects, the Master decides (section 34) |
Section 47 does not cover property of a kind ordinarily sold through a stockbroker, such as listed shares, or property sold in the ordinary course of a business the executor is running. Whether a clause in the will is wide enough to replace the heirs' approval is a question for the estate's attorney. When in doubt, the heirs' signatures cost little and remove the argument.
A deceased estate that cannot pay its debts usually stays with the executor under section 34. The executor reports the position to the creditors in writing. Unless a majority of them, by number and by value, instruct the executor within the period in that notice (at least 14 days) to surrender the estate under the Insolvency Act, the executor sells, after giving the creditors at least 14 days' written notice of the manner and conditions of sale. If the estate is surrendered or sequestrated, a trustee sells instead: see insolvent estate and liquidation auctions. Take advice from the estate's attorney as soon as solvency is in doubt.
For an auction, put three things in front of the heirs
- The manner of sale: a public auction, and the date.
- The conditions of sale the purchaser will sign.
- The reserve: the lowest price at which the property may be sold.
Getting all three approved in writing before the auction makes a dispute after the hammer far less likely. See the reserve price explained.
Two rules executors trip over
- The executor's circle cannot simply buy. A purchase of estate property by the executor, or by the executor's spouse, parent, child, partner, employer, employee or agent, is void unless the Master or the court consents to or confirms it, subject to the will. That applies to a purchase at an auction too. If the executor or anyone in that circle wants to buy, raise it with the estate's attorney, and with us, before they register to bid.
- No benefits for appointments. A court may remove an executor who accepts, or is willing to accept, any benefit for engaging someone to work for the estate, the auctioneer included.
Why auction suits a deceased estate
An executor sells other people's inheritance. The price appears in the liquidation and distribution account, anyone with an interest in the estate may object to that account, and an executor who distributes wrongly can be held personally liable for the loss. So you need to be able to show the price was fair, and an open auction is evidence:
- A market price, set in public. The property is advertised, bidders register and compete, and the price is what the market paid on the day. That is far harder for an unhappy heir to challenge than a price negotiated privately with one buyer.
- A floor the heirs agreed. The reserve means the property cannot sell below a figure the heirs, or the Master, approved in advance.
- A fixed date. The liquidation and distribution account is due within six months of the letters being issued, unless the Master allows longer (section 35). An auction date is a deadline you can plan around.
- A paper trail. Afterwards you get a written report on what each lot achieved, the marketing carried out and the bidder registration record: a record that supports the sale in the liquidation and distribution account if the Master calls for vouchers or an heir questions the price.
Auction is not the only route. Heirs may prefer to take a property as part of their inheritance. Where the will does not prevent it, the adult heirs and the creditors consent and nobody is prejudiced, the Master may authorise the executor to make estate property over to the surviving spouse at an appraised value. A conventional home may do as well by private treaty through Dynamic Real Estate: see auction or estate agent.
Step by step, from death to distribution
- Report the estate. The death notice goes to the Master within 14 days of the death, with the will and an inventory of the assets (Master: how to report a deceased estate). The Master issues letters of executorship or, in a smaller estate, letters of authority.
- Take control and open the estate account. The executor takes custody of the estate's property and keeps its money in a bank account in the estate's name.
- Advertise for creditors. A notice in the Government Gazette and a local newspaper gives creditors between 30 days and three months to lodge claims (section 29). If there is any doubt that the estate can pay its debts, take advice before you fix an auction date.
- Value the assets. The inventory needs estimated values. If the Master thinks an estimate is not reasonably correct, the Master can order the property to be appraised, at the estate's expense, by an appraiser or another person the Master approves. For the estimates themselves, and for setting a reserve, we provide written valuations and inspections.
- Get the sale approved. The heirs' written approval of the auction, the conditions of sale and the reserve, or the Master's approval where section 47 requires it.
- Mandate and marketing. You sign our mandate as executor. We verify ownership against the deeds record, then catalogue, market and show the property.
- Auction day. If bidding reaches the reserve and the auctioneer knocks the property down, it is sold on the approved conditions of sale. If bidding falls short, it does not sell on the day. We can discuss offering it again or selling it privately, but a sale on terms other than those the heirs (or the Master) approved generally needs their written approval again under section 47.
- Transfer. The conveyancer obtains the clearances and the Master's certificate that no objection to the transfer exists, which an executor must lodge with the Deeds Office for a transfer that follows a sale.
- Account and distribute. The sale goes into the liquidation and distribution account, which must lie open for inspection before creditors are paid and heirs receive their shares.
| Stage | Timing |
|---|---|
| Death notice to the Master | Within 14 days of the death (the Master) |
| Creditors' claims period | 30 days to three months from the last advertisement (section 29) |
| Signed mandate to auction day (with us) | About three to four weeks for property |
| Transfer after the auction | The normal conveyancing time plus the Master's certificate, which varies by office |
| Liquidation and distribution account | Within six months of the letters, or longer if the Master allows (section 35) |
| Money that cannot be distributed | To the Master for the Guardian's Fund within two months of the estate becoming distributable (Administration of Estates Act) |
Documents to have ready
Not every line applies to every estate.
| Document | Why it matters |
|---|---|
| Letters of executorship, or letters of authority | Your authority to sell. We see them before we market anything. |
| Your identity document | You sign the mandate as executor. |
| The will accepted by the Master, or the next-of-kin affidavit | Shows who the heirs are, and whether the will says how property is to be sold. |
| The heirs' written approval, or the Master's approval | Section 47. Best signed before the auction date is fixed. |
| Title deed, latest rates account and, for sectional title, the levy statement | Ownership, servitudes, the municipal rates clearance that transfer needs and, for sectional title, the body corporate's levy clearance. |
| Bond and finance details | The bank is settled from the proceeds. On a financed vehicle the bank is usually the title holder. |
| Marriage certificate and antenuptial contract | Whether a joint estate is involved. |
| Leases and details of anyone living there | Who occupies the property, and on what terms. |
| Vehicle registration certificates | The registering authority needs the executor's letters to register a deceased person's vehicle in a new name. |
| A list of the contents, however rough | The starting point for the catalogue. |
Occupied, tenanted or standing empty
The conditions of sale should say whether the property is sold with vacant occupation or subject to someone's right to be there, so settle who is living in it before the catalogue is written.
A family member is living there
Talk early, show them the timeline and agree a date. If someone refuses to leave, the Constitution says no one may be evicted from their home without a court order made after considering all the relevant circumstances, and the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) sets out the procedure. Changing the locks is not a shortcut: evicting an unlawful occupier without a court order is an offence under PIE. Take advice from the estate's attorney.
A tenant is renting it
Rent collected after the death belongs in the estate account. If the property is sold, the Supreme Court of Appeal has confirmed that a purchaser of leased property is bound to recognise the lease and takes the landlord's place in it. Give us a copy of the lease so it is disclosed, and have the conveyancer look at any long lease or option to purchase.
It is standing empty
Tell the insurer that the owner has died and check what the policy says about unoccupied buildings. Keep the rates, levies and electricity paid, and secure the property. We also offer property inspections and property management while the wind-up runs.
Contents, vehicles and other movable assets
- Set the bequests aside first. Items the will leaves to a named person are normally not sold. List them and keep them out of the catalogue, but do not hand them over yet: legatees receive their items only once the liquidation and distribution account has lain open for inspection and the estate is distributable. If the estate cannot pay its debts, bequeathed items may have to be sold as well, so if the estate may be short, ask the estate's attorney before handing anything over.
- Let the heirs choose before the sale. Heirs often want particular pieces. Agree them, with the values recorded for the account, before the catalogue is printed.
- Vehicles. To register a deceased person's vehicle in a new owner's name, the registering authority asks for the executor's letters. If it is financed, the settlement figure comes first. Deceased estate vehicles are part of what our vehicle auctions sell.
- Plant, tools and a business. Farm equipment, workshop machinery and trading stock go through our movable assets auctions. If the deceased owned a business, it may be worth more sold whole as a going concern: see business sales and selling a business as a going concern.
Movable assets can often go to auction sooner than property, and running them alongside the house means one timetable and one report for the account.
Where the money goes
- On the day. The successful bidder signs the conditions of sale, which set out when the deposit and any buyer's commission are due. They also say who holds the deposit until transfer.
- On transfer. For property, the purchaser secures the balance within the period in the conditions of sale, and it is paid out when transfer registers. On registration any bond is settled and the selling costs set out in the conditions of sale are paid. Rates are different: the Deeds Office will not register transfer without the municipality's clearance certificate, which needs the rates and charges for the previous two years paid in full (section 118(1), Municipal Systems Act), and for sectional title the body corporate must confirm the levies are paid or that it is satisfied with the arrangements for payment. Ask the conveyancer early how much that will be and where the money will come from.
- Into the estate account. The net proceeds go into the estate's own bank account, and every payment out must identify the payee, the amount and the reason. An executor who fails to bank or pay over estate money as the Act requires, or uses estate property other than for the estate's benefit, is liable to pay double the amount (or double the value of the property used) into the estate, unless the Master exempts them for good cause.
- Through the account. Once the liquidation and distribution account has lain open for inspection without objection, the executor pays the creditors and distributes to the heirs. A minor heir's cash generally goes to the Master for the Guardian's Fund, unless the will provides otherwise.
Tax on the sale
For capital gains tax, the estate is generally treated as having acquired an asset at its market value on the date of death (an asset that will pass to a surviving spouse who is a South African resident is treated differently). If the executor sells for more, the difference can be a capital gain in the estate itself; for less, a loss. The same date-of-death value is also used for the deceased's deemed disposal on death, so a sound valuation matters in the inventory, the deceased's final tax return and the estate's own return. Speak to the estate's tax practitioner before you agree the reserve.
Our charges
We charge the seller an appraisal fee, a listing fee and commission on the sale price. They vary per auction and are set out in writing in the conditions of sale before you sign. Read the rules of auction too. See also selling property on auction. To talk through an estate, contact us or phone 086 155 2288.