Proper authority crucial in trust transactions
Category Advice
In terms of the Trust Property Control Act a trustee cannot perform any act in his/her capacity as trustee until he/she has received letters of authority from the Master of the High Court authorising him/her to act on behalf of the trust.
The actions of a trustee acting on behalf of a trust prior to being authorised to do so, are void. The unauthorised actions cannot be ratified by the trust after the fact.
Therefore, when purchasing property on behalf of a trust, always be sure, amongst other things, that:
- The person signing the agreement of sale on behalf of the trust is authorised to do so in terms of the letters of authority issued by the Master of the High Court.
- The trust resolution signed by the trustees in compliance with the trust deed, authorising one of the trustees to purchase the property, is signed prior to that person signing the agreement of sale.
Author: Smith Tabata Buchanan Boyes
