Be careful when contracting with a trust
A recent Supreme Court of Appeal (SCA) judgment has again raised warnings about the implications of not complying with statutory requirements when buying and selling immovable property, as well as not ensuring that important procedures are followed when one of the contracting parties is a trust.
The assets and liabilities constituting the trust vest in the trustees and it is they who administer them. They are not the agents of the trust, nor for that matter of the beneficiaries.
Trusts are registered with the Master of the High Court in terms of the Trust Property Control Act, 1988 (Trust Act). When a trust is first registered, and subsequently when there are changes to the trustees, the Master issues letters of authority confirming the identity of the current trustees and the Trust Act provides that trustees may only act if authorized by letters of authority.