Inherited Property & Co-Heirs: Who Pays the Rates and Taxes Before the House is Sold?

www.leonita.co,za, wills, deceased estates administration, sale of property

When a property owner passes away and leaves a home to multiple beneficiaries, winding up the estate can become financially and emotionally complicated—especially if one person continues living in the house while waiting for it to be sold.

To understand how South African law protects your inheritance, let’s look at a practical example using two siblings, Sipho and Thabo, who have been left equal shares of their late father's house. Sipho is currently living in the house, while Thabo lives elsewhere.

1. The General Sales Process

When a property owner passes away with a valid will, the house does not immediately belong to the heirs. It belongs to the Deceased Estate.

The Executor Steps In: The Executor is formally appointed by the Master of the High Court. Only the Executor has the legal authority to sign a mandate with an estate agent and sign the final sale agreement.
Paying the Costs: The property is put on the market. Once a buyer is found, the transfer attorneys will calculate all the property-related selling costs.
Calculating the Split: These selling costs are deducted directly from the gross purchase price. The remaining cash is what gets split 50/50 between Sipho and Thabo.
Typical Selling Costs Include:

Estate agent’s commission
Conveyancing (transfer) attorney fees
Compliance certificates (Electrical, Gas, Beetle, Plumbing)
Municipal Rates Clearance Certificate

2. What Happens While Sipho Stays in the House?

While Sipho is living in the house waiting for it to sell, he cannot be summarily thrown out, but he also cannot live there at Thabo's financial expense.

Responsibility for the ongoing monthly property expenses is split by law and fairness into two categories:

Consumption Costs (Sipho’s Responsibility): Sipho must pay for everything he personally uses. This includes water, electricity, gas, refuse removal, and sewage.
Ownership Costs (Estate’s Responsibility): The Deceased Estate remains legally responsible for the underlying fixed expenses because it still owns the asset. This includes property rates and taxes, and homeowners insurance for the building.

3. The Procedure to Protect Thabo’s 50% Payout

If Sipho refuses to pay for his utility consumption, or if he refuses to move out (thereby delaying the sale and causing municipal debts to pile up), the Executor has a legal duty to protect Thabo’s inheritance.

To ensure Thabo is not penalised and receives his full 50% share of the original property value, the Executor will follow this exact procedure:

Step 1: Implement Occupational Rent

The Executor will charge Sipho occupational rent for living in the house after their father’s passing. Because Thabo owns 50% of the right to that asset, Sipho is essentially occupying Thabo’s 50% of the property for free. The occupational rent should ideally match local market rental rates for a similar home.

Step 2: Pay the Municipality from Estate Funds

To prevent the municipality from cutting off services or placing a legal hold on the sale, the Executor will use cash from the estate's bank account to keep property rates, taxes, and bills up to date. If there are insufficient funds, the Executor will need to start selling movable property to cover these costs, beginning with furniture, vehicles, and other items.

Step 3: Adjust the Final Liquidation & Distribution (L&D) Account

This is where Thabo is fully protected. When the house is sold, the Executor creates a final financial ledger called the L&D Account.

The total municipal debt and unpaid occupational rent built up by Sipho will be calculated as a debt owed by Sipho to the estate.
The Executor will deduct 100% of those accumulated costs directly from Sipho’s 50% share of the property payout.
Thabo’s 50% share will be paid out cleanly, completely untouched by the expenses Sipho incurred.

Step 4: Legal Eviction (If Necessary)

If Sipho purposely sabotages the sale by refusing to let buyers view the home or refusing to move out when a buyer is found, the Executor has the legal authority—and obligation—to apply to the High Court for an eviction order, with costs against Sipho, to ensure the terms of the will are fulfilled.

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