Trustee authority to act on behalf of a trust

0
112

Carina van Vuuren | Director | Norton Rose Fulbright South Africa | mail me |


A sale agreement had been signed on behalf of a trust, as purchaser, by a single trustee whose conduct was thereafter ratified by the remaining trustees.

The court held that the agreement of sale was not valid and enforceable and it could not be ratified after the fact. In terms of section 2(1) of the Alienation of Land Act 68 of 1981, a contract of alienation of land must be in writing and signed by the parties or by their agents on their written authority. Therefore the trustee signing on behalf of the trust requires prior written authorisation in terms of the trust deed or by means of the trustee’s resolution.

Even if decisions can be taken on a majority vote or if any of the trustees are entitled to delegate all or any of their powers under the trust deeds to any person approved by the co-trustees, it does not suggest that a trustee may act without the authority of the other trustees. A party needs to ensure that all the requirements have been met by insisting to review the Letter of Authority and trust deed prior to entering into any agreement with a trust.

In Thorpe and Others v Trittenwein and Another (SCA) sale of the land was declared invalid.


 

Advertisement

LEAVE A REPLY

Please enter your comment!
Please enter your name here

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.

I agree to these terms.