Beneficiary: A beneficiary is an individual who is entitled to collect the property, as prescribed by the decedent’s legal will and testament.
Decedent: Decedent is a legal term used to refer to a deceased person.
Executor: An executor of an estate is an individual appointed to administer the last will and testament of a deceased person. The executor’s main duty is to fulfil the wishes of the deceased person, as stipulated in their will, ensuring that assets are distributed to the intended beneficiaries.
Heir: An heir is legally entitled to inherit some or all of the estate of another person who has died without a legal will and testament in place (intestate), in terms of the Intestate Succession Act, 81 of 1987. Typically, heirs are the spouse, children, descendants, or other close relatives of the decedent (parents or siblings).
Q: What is a deceased estate?
A: According to the Department of Justice and Constitutional Development, a deceased estate comes into existence when a person dies. It is the collective sum of an individual’s worth, in terms of all property, possessions, and other assets belonging to that person. Such estate must then be administered and distributed in terms of the deceased's will or failing a valid will, in terms of the Intestate Succession Act, 81 of 1987.
Q: What happens to a person’s estate when he or she dies?
A: At death the estate of the deceased person is frozen, and no-one may withdraw funds from the deceased’s bank accounts or deal with any of the estate assets without the necessary permission from the Master of the High Court. (Department of Justice and Constitutional Development)
Q: What happens in a case where the Tenant has undergone the application process/screening for a property and has been approved by the Landlord, but the Landlord passes away before signing the lease agreement? In this scenario, the Heir to the deceased estate would like the deal to proceed and for the Tenant to take occupation but an Executor has not yet been appointed.A: Without the signature of the Landlord there is no valid agreement. The Heir/s to the property may ultimately have a right to the property but that right will not be realised until such a time as the estate has been wound-up. Therefore, they do not have a say as to whether the Tenant is able to move in.
In certain instances, it is possible to apply to the Master’s Office for the appointment of an interim Curator, pending the appointment of an Executor. The interim Curator could step into the shoes of the deceased Landlord and sign the lease.
Q: In terms of the case above, what happens if the Landlord signed a mandate and provided a Power of Attorney to Etchells & Young to sign the lease agreement on his behalf. Can Etchells & Young go ahead and sign the lease agreement after the Landlord has passed away?
A: A Power of Attorney lapses when the Principal, in this case the Landlord, dies. It follows then that the agent’s (in this case Etchells & Young) powers will lapse too. Etchells & Young would need the Executor’s/interim Curator’s authority to proceed.
Q: At what stage is the Decedent’s bank account frozen?
A: Accounts are frozen as soon as the bank/s in question are made aware of the death of the deceased and have been provided with a death certificate. The estate of a deceased person must be reported to the Master of the High Court within 14 days of the date of death.
Q: What happens if the Landlord passes away during the lease period? Can the lease be terminated by the Heir or Executor under normal circumstances, even if the Tenant has not breached the contract?
A: Unless there is a clause specifically stating that the lease will terminate on the death of either of the parties, the lease will continue. Should there be such a clause the tenant will still need to be given a reasonable amount of time to find alternative accommodation. Where there is no such clause, the rights and obligations created by the lease agreement will bind the deceased’s estate.
Q: Can the Landlord’s spouse provide new bank account details to receive the rent?
A: No, he/she cannot. Any money owed to the estate must be accounted for in order to wind up the estate. This money would be placed into the late estate account, managed by the Executor.
Q: What happens if the property is in both the husband and wife’s names (married in community of property), and the monthly rental is paid into the husband’s bank account, and he passes away. Does the Landlord’s spouse have authority to change the bank account details in such a case?
A: In this case, the Executor of the husband’s estate will co-sign a letter to the Tenant informing them of the change in banking details. However, it is important to note that, should the owners of the property be married in community of property the late estate will be entitled to half the rental to which it will have a claim later on. Should the wife need the money to survive, she may have a claim against the deceased estate under “The Maintenance of Surviving Spouses Act 27 of 1990”.
Q: What happens if a Landlord falls gravely ill and is incapacitated, but has not yet died and does not have a Curator appointed. If the property in his name only, can his spouse instruct Etchells & Young to pay the monthly rental into her account?
A: No, a Curator would need to be appointed.
For expert, quality legal advice on all manner of property transactions or general/commercial litigation, contact David Wainstein, of Specialist Property Attorneys, Harris Incorporated.