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Section 18(3) sales

25 February 2010

Section 18(3) of the Administration of Estates Act, 66 of 1965, provides that if the value of an estate is less than R125 000 "the Master may dispense with the appointment of an executor and give directions as to the manner in which any such estate shall be liquidated and distributed."

There are two aspects that need to be clarified with regard to the wording of section 18(3), namely:

  • The Master must give directions as to the manner in which any estate must be liquidated and distributed;
    and
  • The meaning of "liquidated " as used in deceased estates.
With regard to the first aspect, the current letters of authority (J 170) issued by the Masters and designated officials at the Service Points of the Master authorise (direct) the appointee (Master's Representative) to "take control of the assets, pay the debts and then transfer the residue of the estate to the heir/heirs entitled thereto by law".

This does not include the sale of assets, especially not the sale of fixed property. In fact, the letter of authority, in a footnote, states that in the case of immovable property it must be borne in mind that transfer thereof must be registered in the Deeds Office.

Should the Master's Representative need to sell the immovable property a further direction which authorises the sale needs to be obtained from the Master in terms of section 18(3).

With regard to the second aspect, namely the meaning of "liquidated " as found in section 18(3), your attention is drawn to the decision Craddock's Estate v Craddock and others 1951 NPD 51, where the following is said:
"Speaking generally, he (the executor) must liquidate the estate, pay the claims of creditors and distribute the balance among those who are entitled to it in terms of the will or ab intestate. But "liquidate" does not mean "realise", but "reduce into possession".

Although section 47 of the Administration of Estates act only applies to executors, the Master will also insist on requirements similar to that of section 47, in cases where an application for a section 18(3) endorsement is lodged and inevitably when one of the circumstances mentioned in section 47 is applicable. Therefore if any absentee, minor or person under curatorship is heir to the property or if the heirs are unable to agree on the manner and conditions of the sale, the Master will approve the manner in, and conditions on which fixed property will be sold in terms of section 18(3).

Taking into account what has been said above, the Masters and the Deeds Office are in agreement that the general letter of authority issued by the Master in terms of section 18(3) does not authorise the Master's Representative to sell immovable property. Where the Master's Representative wants (needs) to sell the property after having received his/her letter of authority, he/she will have to obtain a further direction from the Master which authorises the sale of the property. The application to the Master will follow the same format as an application for a section 42(2) application. The same form can also be used - the reference to section 42(2) can merely be changed to section 18(3).

Republished with permission from SA Deeds Journal

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