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Court rules on sale of family property
What you need to know:
- The Court of Appeal ruled that the consent or authority of the heir or administrator of the estate is not necessary for the sale to be valid and legally binding.
A beneficiary in the estate of a deceased person can sell their interests in land or any property even when they do not have letters of administration granted to them by a court of law, the Court of Appeal has ruled.
A panel of three justices of the Appeal Court have unanimously ruled that a beneficiary can also enter into a valid agreement of sale of land formerly owned by a deceased person. They agreed that this can get the green light even when their name is not registered on the land title. There is a caveat, though: It has to be part of their share in the estate.
“Letters of Administration grant the administrator of an estate a legal title to the property of a dead person in trust for the beneficiaries; while indirectly acknowledging the existence of an equitable title of the beneficiaries in the same property termed as beneficial interest or estate,” the judges held in a unanimous decision.
They added that the consent or authority of the heir or administrator of the estate is not necessary for the sale to be valid and legally binding.
“The beneficial interest of an estate can be validly sold or assigned to another person (third party) by a beneficiary. A purchaser of the beneficial interest can enforce his rights against the administrator of the estate in the same way the beneficiary is entitled to,” the court held.
The justices—Catherine Bamugemereire, Muzamiru Kibeedi and Christopher Gashirabake—made the major pronouncements, affecting the sale of lands of deceased persons while determining the long-standing legal battle for ownership of land on Plot 9 Block 28, at Kashaari that measures 30 acres. The said land was part of the 66.84 hectare (about 160.162 acres) land owned by the late Eric Rwanchwende.
The Appeal Court ruled in favour of Dr Diana Kanzira who successfully challenged a lower court which had ruled in favour of Herbert Natukunda Rwanchwende, the administrator of his late father’s estate.
The case
In 2007, Herbert sued Dr Kanzira jointly with his brother Robert Tukamuhabwa Rwanchwende, disputing a land transaction between the two people for sale of a 30-acre land. The land in question formed part of their late father’s estate.
In the High Court, Herbert’s claim was that Robert had not been allocated his part of the share of his late father’s estate. Herbert also added that his brother had no authority to sell any part of the estate. He further submitted that Robert was suffering from a mental illness at that time and had no capacity to contract with the appellant.
In the lead judgement, Justice Bamugemereire held that although the court was dealing, primarily, with the validity of a land-sale agreement, issues of administration, including failure to file an inventory, emerged and that the court got concerned that the administrator of an estate over-reaches his mandate, bullies and takes advantage of vulnerable beneficiaries.
Justice Bamugemereire observed that the estate of the deceased, although it was not distributed, guaranteed each member clarity about what portion of the land belonged to them.
She explained that it is trite that though Section 180 of the Succession Act grants the administrator powers to manage the estate of a deceased person, including authorising the beneficiaries thereof; it does not make him a sole-owner because an administrator only holds the land in trust.
“Section 180 of the Succession Act did not envisage that the administrator would act like a private proprietor of the deceased’s estate and turn the said property into his own. He, at all times, acts on behalf of the beneficiaries,” Justice Bamugemereire held.
Anomaly
According to the court, it is either out of sheer ignorance or lack of knowledge that the family of the late Eric Rwanchwende allowed one person a monopoly of power.
“Where a family has decided to apportion and allot each member a part of the whole estate, it is envisaged that the beneficiary, aware of their rights and interests, may deal with the land as he or she wishes. However, the high-handed methods by which the late Eric Rwanchende’s estate was managed borders on illegality,” the court held.
The judge reasoned that although Section 180 of the Succession Act, states that an administrator of a deceased person is his or her legal representative for all purposes and all the property of the deceased person vested in him or her as such, it does not vitiate the rights of the beneficiaries of an estate.
The court has now declared that Dr Kanzira entered into a contract for sale of land with both Herbert and Robert and that the contract is enforceable as against the administrator.
“I direct that within 60 days of the first respondent (Herbert) receiving a copy of a decree extracted by the appellant (Kanzira) from this judgment, he shall sign and deliver to the appellant transfer forms and any other documents required to effect the subdivision of the land which forms the subject of this appeal from the whole in order to vest ownership in the appellant. The appellant shall obtain a certificate of title in her name. The costs of the subdivision and transfer shall be met by the appellant,” the court ordered.
What they said
However, a section of the lawyers who asked not to be named for fear of reprimand from the court said for one to rely on the court decision, letters of administration must have been granted in respect of the estate of the deceased person.
“The land must have been distributed, each beneficiary given his or her individual share in the estate, but the administrator has not transferred the portion into the beneficiary’s name,” said one lawyer, adding that the portion sold must be part of one’s individual share or inheritance.
The seller must be a beneficiary selling his/her own individual share and a person to whom the letters of administration were granted must have refused to sign the transfer form in favour of the buyer for the portion sold by one of the beneficiaries out of their individual inheritance.
The lawyer observed that the case does not apply where the land in question is communal land like family burial grounds and where the estate has not been distributed to the respective beneficiaries, and each individual’s inheritance clearly defined.
“However, where all the beneficiaries unanimously agree to sell the communal land, or the whole of the undistributed estate but the holder of letters of administration opposes the unanimous decision of the family or refuses to sign a transfer in favour of a buyer of the communal land arising from the unanimous decision of the beneficiaries, then the judgement can be used to force the administrator to sign the transfer forms,” they said.
