Registering a property in the name of a minor

Parents sometimes wish to invest in property and register the property
in their minor child’s name.

There is no legal impediment to registering property in the name of a minor.
However, with regards to the contract (deed of sale) to purchase the property
it must be noted that minors have no or limited contractual capacity depending
on their age. Minors under the age of 7 have no contractual capacity and the
deed of sale must be signed on their behalf by their guardians (normally the
parents). Minors aged 7 to 18 years can sign the contract with their parents
assistance or alternatively the parents can sign the contract on behalf of
the minor.

Once property has been registered in the name of a minor it may not be sold
or mortgaged (bonded) without the authorisation of the Master of the High Court
(if the value of the property or amount of the bond as the case may be does not
exceed R100000.00) or the High Court itself (where the value of the property or
amount of the bond exceeds R100000.00)

If property which is to be registered in a minor’s name is being purchased for
cash then no authorisation is required. However, if parents wish to raise money
to purchase the property by registering a bond over the property then the
authorisation of either the Master or the High Court is required. If property
is originally purchased for cash and registered in the minor’s name and the
parents at a later date wish to register a bond over the property the Master
or the High Court must authorise the registration of the bond. Authorisation
will only be granted if the mortgage is necessary for the preservation or
improvement of the property or for the maintenance, education or other benefit
of the minor.

Similarly if one wishes to sell property belonging to a minor the Master or
the High Court will only authorise the sale if they are satisfied that the sale
will be to the advantage of and in the interests of the minor.

To obtain the necessary authorisation formal application must be submitted to
the Master or the High Court. These applications, particularly the application
to the High Court, are costly. The Master or the High Court will not grant
authorisation unless it is proven beyond a reasonable doubt that the sale or
mortgage of the property is in the interests of the minor.