Money

Sectional Title: What happens when an owner dies?

When a person dies, the Master of the High Court appoints a trustee to wind up their estate. This involves paying any outstanding debts, realising any assets and distributing them according to the instructions contained in the deceased person’s will. During this time, the trustee of a deceased estate with property in a sectional title scheme, acting in the best interests of that estate, could attend general meetings, speak and vote on issues as if he or she were the owner of the section.

Ownership of the section remains with the deceased estate and it is the trustee who must fulfil any outstanding obligations that the deceased owner might have had as an owner in the scheme. These obligations could include completing any physical alterations connected with the property, such as an extension of the section or improving or changing an exclusive use area.

Other obligations might include participation in body corporate decisions, especially those that might affect the value of the unit, such as taking part in a resolution authorising an improvement to the common property or a change to the rules of the scheme. During this time the trustee would be responsible for any financial obligations the owner might have had, including paying the monthly levy, a special levy if one was running and any penalties the owner might have incurred. The payment of special levies is an interesting point under these circumstances. The Sectional Titles Act, in section 37(2A), states that the persons who own the units in the scheme at the time when the trustees take the resolution raising a special levy are responsible for paying that special levy.

And unlike the case of the ordinary levy, that responsibility remains with those persons, even though some might sell and transfer their units while the special levy is running. As mentioned earlier, it is the deceased person’s estate that owns the unit and so it is the trustee of the estate who is responsible for paying the special levy from the deceased estate’s funds. It is only when the trustee transfers the property, either to a beneficiary of the will or to a third person when realising the asset, that ownership, and the responsibilities and liabilities of ownership, passes to another person.

Via The South African Property Transfer Guide

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