Written by Roy Bregman, an admitted attorney with over 51 years of experience in deceased estates.

A client asked: “A person signed an Offer to Purchase (OTP) to sell their property and instructed lawyers to proceed with the transfer. However, they passed away before the transfer was registered. How can one ensure that the executor of the deceased’s estate complies with the signed agreement and completes the transaction?”

Understanding Property Sales When a Seller Dies: A Legal Guide

Key Takeaways

• A Contract is Still a Contract: A valid Offer to Purchase (OTP) does not become void if the seller passes away. The agreement remains legally binding on the seller’s estate.​

• The Executor Must Act: The executor, appointed by the Master of the High Court to manage the deceased’s estate, “steps into the shoes” of the seller and is obligated to honour the OTP and proceed with the property transfer.​

• Expect Delays: The transfer process will likely take longer than a standard transaction. The executor must first be formally appointed and then settle all estate debts before the property can be transferred to the buyer’s name.​

• Buyers Have Rights: If the executor unreasonably delays or refuses to comply with the sale agreement, the buyer has the right to take legal action to compel them to fulfil the contract’s terms.

Introduction to the Legal Principles

When a person signs an Offer to Purchase (OTP) to sell their property, they create a legally binding agreement. A common concern arises when the seller passes away after the OTP is signed but before the property transfer is registered at the Deeds Office. The central legal principle governing this scenario is that the death of a party does not automatically invalidate a valid contract. The rights and obligations established in the OTP are passed on to the deceased’s estate. The estate, represented by a legally appointed executor, “steps into the shoes” of the deceased seller and is bound to honour the terms of the sale agreement.​

This ensures that a buyer’s rights are protected and that the deceased’s contractual undertakings are fulfilled, provided the OTP was validly concluded. The process, however, is subject to the administration of the deceased estate, which introduces specific procedures and potential delays.

The Legal Framework: Roles and Procedures

The Executor’s Central Role

Upon the seller’s death, their estate must be reported to the Master of the High Court. The Master then appoints an executor by issuing Letters of Executorship (the official document giving the executor power to act). This executor is the only person with the legal authority to act on behalf of the estate, including managing its assets and liabilities. Case law confirms that the court recognizes only the executor, not heirs, as the representative of the estate. The executor’s primary duty is to administer the estate according to law, which includes honouring valid contracts entered into by the deceased.​

Steps to Finalise the Transfer

1. Appointment and Authority: The first step is the formal appointment of the executor. Without Letters of Executorship, no one can legally sign transfer documents on behalf of the deceased’s estate.​
2. Honouring the OTP: The executor is obliged to proceed with the sale as outlined in the OTP. They will sign the necessary transfer documents in their capacity as the estate’s representative.​
3. Estate Administration: Before the property can be transferred, the executor must settle all the estate’s debts relating to the property. This includes obtaining clearance certificates from the local municipality for rates and taxes and ensuring all other liabilities are paid.​
4. Conveyancing Process: The transfer documents must be prepared by a conveyancer, as required by the Deeds Registries Act. The conveyancer will work with the executor to lodge the documents at the Deeds Office for registration in the buyer’s name.​

What if the Executor Refuses to Comply?

If an executor unreasonably delays or refuses to honour a valid OTP, the buyer has legal recourse. The buyer can apply to the court for an order compelling the executor to perform the contractual obligations. Such action is typically a last resort when disputes or unwarranted delays hinder the process.​

Conclusion

The death of a property seller after signing an OTP does not terminate the sale. The contract remains valid and enforceable against the deceased’s estate. The appointed executor is legally bound to take the necessary steps to finalise the transfer, which includes signing documents and settling estate debts. While the process may experience delays due to the formalities of estate administration, the buyer’s right to take ownership of the property is secure. Clear communication between the buyer, the executor, and the conveyancer is essential to navigate the process smoothly and ensure the deceased’s final wishes, as captured in the sale agreement, are respected.​

Navigating a deceased estate property transfer can be complex. If you are a buyer or an heir facing this situation, contact Bregman’s Attorneys today for expert guidance

Frequently Asked Questions (FAQ)

• Q: Does the Offer to Purchase expire if the seller dies?
  • A: No. A valid OTP is a binding contract that remains enforceable against the deceased’s estate. The executor must honour it.
• Q: How long does a deceased estate property transfer take?
  • A: The process is often longer than a standard transfer because the executor must first be formally appointed by the Master and then settle all estate debts. This can add several months to the timeline.
• Q: Can the heirs cancel the sale if they want to keep the property?
  • A: No. If a valid OTP was signed by the deceased, neither the executor nor the heirs can unilaterally cancel the sale. The buyer’s rights take precedence.
• Q: What should I do if the executor is not cooperating?
  • A: You should first communicate in writing with the executor and the estate’s attorney. If there is still no progress, your next step is to seek legal advice about applying to the court to compel the executor to perform their duties.