Buying a House in a Child's Name: What Parents Should Know

By Tersia de Beer | Estate agent in Kroonstad, Africa Estate

Yes, a child can own a house, but the child does not sign alone. Parents and grandparents in Kroonstad often ask me whether they can buy a house in a child's name. They can: a minor can be the owner, and the house can be registered in his or her name. But the purchase, a bond and a later sale work differently than for an adult, and that difference costs money if it is not done right from the start.

Who is a minor?

Section 17 of the Children's Act says a child becomes a major on reaching the age of 18 years. Until then the child's parent or guardian acts for the child. Section 18(3) of the Children's Act says a parent who acts as guardian must administer and safeguard the child's property and property interests, and assist or represent the child in contractual and other legal matters.

Buying: the guardian signs with or for the child

A house can, for example, be bought for cash for a child and registered in the child's name. The child does not conclude the sale agreement alone as an adult would: the guardian assists or represents the child. Let the conveyancer confirm who signs as guardian and in what capacity before the sale agreement is signed.

A bond on the child's house

Putting a bond over the child's house is not only a matter between the parent and the bank. Section 80(1) of the Administration of Estates Act provides that no natural guardian may alienate or mortgage any immovable property belonging to his minor child unless authorised by the Court or by the Master. The Master may authorise a mortgage up to an amount the Minister determines by notice in the Gazette, if it is necessary for the preservation or improvement of the property, or for the child's maintenance, education or other benefit. The bank must still approve the loan as well.

Selling later: not simply

The parents cannot simply sell the child's house. The same section 80 applies: the sale of a minor's immovable property must be authorised by the Court or the Master. The Master may authorise it if the value of the property does not exceed the amount the Minister determines in the Gazette and the sale is in the child's interest; otherwise it goes to court. Section 18(3)(c) of the Children's Act also names the guardian's consent to the alienation or encumbrance of the child's immovable property, and section 18(5) requires the consent of all the persons who have guardianship of the child, unless a court orders otherwise.

The house belongs to the child

This is the part many parents overlook. If the house is registered in the child's name, it belongs to the child. The parent manages it as guardian; the parent does not become the owner because he or she paid for it. Think carefully about the purpose first: an investment for the child's future, a home for a student, or an inheritance passed on early.

What I advise parents before they sign

• Decide first whether the house really should be in the child's name, or rather in the parents' names.
• Let the conveyancer check the guardianship and the signing.
• If there will be a bond, ask the bank and the attorney beforehand about the Master's or the court's authority.
• Remember that a later sale before the child turns 18 needs authority again.

Let the conveyancer check the guardianship, the finance and the signing before the sale agreement is signed. This article is general information from the Children's Act 38 of 2005 and the Administration of Estates Act 66 of 1965, not legal advice. Read also who may sign when a house is in a deceased estate, or ask for a free written valuation.

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