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Representing a dead investor’s interests

REAL ESTATE
By Harold Ayodo | Aug 20th 2015 | 3 min read
By Harold Ayodo | August 20th 2015
REAL ESTATE

When a property owner dies, a personal representative - the person entrusted with the management of the estate of the deceased - is normally appointed to take care of administration responsibilities.

The administrator can be appointed by a court, nominated by will, or selected by the person involved and their duties and responsibilities are often supervised by courts.

The administrators must carry on their duties within the law. There are currently cases in court where personal representatives have been sue for fraud.

According to the Law of Succession Act, a personal representative is the administrator of a deceased person’s estate. In most cases, the first duty of a personal representative is to ensure the investor is accorded a decent burial from the resources of his or her estate.

Some real estate investors borrow money from varied sources, including banks, to construct commercial or residential units for either sale or hire.

Should they pass on before settling the debts, the personal representative must ensure that the arrears are settled using proceeds (rent) from the estate. The administrator can also cater for the reasonable expenses of the deceased investor, for example, paying out mortgages.

And within six months, the representative is required to produce in court a full and accurate inventory of assets, liabilities and accounts of all transactions.

The court often issues personal representatives with a letter of administration before other legal beneficiaries, public trustees or creditors of the deceased.

Legal document

The legal document enables the administrator to manage the property of the deceased, sue for debts, pay school fees for their children and repair properties.

For instance, if the deceased owned buildings in Nairobi, the administrator can repair drainage, sewers and leaking roofs. After six months, the administrator should apply in court for confirmation of the letters of administration.

He or she must indicate the names of beneficiaries and their shares on the application. If the investor left six children with instructions in a will that they inherit his or her investments, it must be indicated. After confirmation of the grant, the administrator can give the beneficiaries their share of property as per the will.

The representatives have powers to sue on behalf of the estate of the deceased or liquidate the assets entrusted to them.

However, the administrators cannot purchase the property of the deceased or sell the investments before confirmation of the grant. The court can cancel the letters of administration even after confirmation if they were obtained illegally.

For instance, the administrator may have made a dishonest statement or concealed important facts during the application in court. For example, the brother or sister of the deceased may have applied for the letters of administration without consent of the widow(s).

In such cases, the widow(s) can apply in court for cancellation of the grant and seek appointment. Generally, the court decides whom to give the letters of administration, if there is a dispute, in the interest of all concerned.

The Law of Succession provides that no one shall meddle or deal in any property of a deceased person without a will or a grant. People who interfere with property of the deceased illegally are guilty of a punishable offence. Alternatively, the ‘intruder’ would be answerable to the legal administrator for the assets he or she interfered with. He or she can be sued in court.

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