By Dickson Jere
He died intestate (without a Will) and his oldest daughter was appointed Administrator of the Estate of the deceased. She then borrowed money from a lender and used the deceased house as collateral – without the knowledge of her younger siblings who were beneficiaries. As fate would have it, she failed to repay the loan and the lender attempted to foreclose and sale the house. He applied to court for an order.
Can the Administrator mortgage property of the deceased?
The High Court ruled that the Administrator of the estate has no powers whatsoever to mortgage or sale the property forming part of the estate. This decision prompted the lender of the money to launch an appeal in the Court of Appeal.
Having analyzed the facts of the case, the three-member panel of the Court of Appeal opined thus;
“Clearly, the first respondent (Administrator) had no authority to deposit the title deeds with the appellant (lender),” the Court ruled.
“An administrator is not permitted to mortgage estate property under any circumstances and for that reason, we are of the view that the lower court was on firm ground when it found that the first respondent (Administrator) had no capacity to mortgage the property in issue as it was outside her legal authority,” the three Judges ruled.
Even though the Administrator had signed off the house and obtained the money from the lender, the Court opined that the money lender should have done his homework before releasing the money.
“The appellant (Lender) cannot escape blame for lending money to an administrator without ascertaining the interests of other beneficiaries in the property in issue,” the judges said.
They also added that the names on the title deeds were for the deceased, which should have alerted the lender to do more due diligence as the borrower was merely an Administrator.
Case citation – Alexander Zimba v Geraldine Lukanga and Another – Appeal No. 40/2021 (Judgment delivered last month).
This case is useful to all those staying Law of Probate, Family Law and Trusts as well as those involved in Administration of Estates.
Note that this piece is for academic and intellectual discourse and does not constitute legal opinion on the subject matter. For legal opinion, kindly engage your lawyer.