FILTERS:

Deceased developer

10 February 2011

The question raised at conference was:
"May an executor, administering the estate of a deceased 'developer' apply for the opening of a sectional title register?

RESOLUTION
No, the land must be transferred to the heirs and they must make the application."

In my humble opinion this is too much of a general statement. Sectional title schemes are mostly developed with a view to sell the units. If a developer dies before the units, even if only some of the units in the scheme were sold, were transferred to the purchasers, then surely the resolution cannot be followed?

It is general knowledge and practice e.g. that property sold by a deceased person prior to his death must be transferred by the executor to the purchaser. Meyerowitz says in Meyerowitz on Administration of Estates (sixth edition) at 12.39:

"The death of a person does not put an end to contracts entered into by him unless they are of a personal nature, e.g. where they required his personal services or skills. Except in such cases they are binding on the executor, e.g. a contract of purchase and sale, or a suretyship"(see Kriel v Kriel SC 49; Liquidator African Commercial Co Ltd v Estate Bey 1955 (3) SA 565).

It is on exactly this ground that the executor passes transfer of land sold by a deceased person during his or her lifetime.

The definition of "developer" in the Sectional Titles Act 95/1986 starts off with the words "…means a person who is the registered owner of land…or his successor in title…" Whilst "registered owner" per se is not defined in the act, "owner" in relation to immovable property is defined in the act to include "…the executor of an owner who has died…". One must assume that "registered owner" is the "owner" as defined. A unit per section 3(4) shall be deemed to be land, therefor immovable property. As far as this is concerned the act therefor allows for an executor to bring the application for the opening of a sectional title register.

There is no contract between the heirs and the purchasers, and the heirs have no locus standi in the matter. Also, the heirs are not heirs in relation to such units that have been sold by the deceased developer to third parties. They have no claim against the estate for such units to be transferred to them. Even if the units were bequeathed to the heirs the contracts of sale and purchase entered into between the deceased developer and the purchaser must enjoy preference and will be given effect to by the executor. The units will be reflected in the liquidation and distribution account as having been sold. Most certainly the entire scheme cannot be reflected in the liquidation and distribution account as having been awarded to heirs, who have no claim to transfer thereof.

It follows then that if the application for the opening of a sectional title register must be made to the Registrar of Deeds so as to give effect to the contracts of sale and purchase, it must of necessity be brought by the executor and the not heirs of the developer. It is not a duty that the executor can delegate or pass on to the heirs. Applying for the opening of a sectional title register is not a contract - it is merely an administrative action which must be performed by the executor to enable him/her to fulfil his obligations towards the purchasers of the various units as part of the administration of the estate.

Conference Resolution 83/2010 needs to reviewed or withdrawn. It is clear that in different circumstances different procedures must be followed.

Dudley Lee
7/1/2011


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