The Children’s Act No. 38 of 2005 and South African common law states that all persons under the age of 18 are considered minors and have limited contractual capacity.
A contract may be concluded with a minor child without the consent or assistance of the parents or guardians provided that it does not impose any obligations on a minor child and is exclusively to their benefit. Minors can therefore own property and can accept a donation or inheritance without the assistance of their parents or guardians, but do not have the contractual capacity to sell it, donate it or register a mortgage over the property without the assistance of their parents of legal guardians.
The contractual capacity of minor children depends on their age, specifically:
1. Children under the age of 7 years have no contractual capacity and therefore a contract concluded by a minor under the age of 7 years will be invalid. The parents or natural guardians of a minor under the age of 7 can conclude a contract on behalf of the child.
2. Children older than 7 years, but younger than 18 years have limited contractual capacity and can conclude contracts and alienate immoveable property with the assistance and under the supervision of their parents or guardians. If a contract is concluded with a minor in this age group without the assistance of the parents or guardians, the parents or guardians can choose to repudiate or ratify the contract.
According to Section 18(3)(c)(v) and Section 18(5) of the Children’s Act No. 38 of 2005, both parents or guardians must act on behalf of the minor child or assist the minor child if both are still alive and are still the guardians.
Section 80 of the Estates Act 66 of 1965 further states that no guardian shall be entitled to alienate or encumber immoveable property belonging to a minor child without the consent and permission of the High Court or the Master of the High Court. If the value of the property is less than R250 000.00, the parents or guardians will be able to approach the Masters Office for permission, but if the value exceeds R250 000.00, an application will have to be brought in the High Court, the costs of which can be astronomical.
Although minor children can own property, dealing with real estate is complicated and often impractical in light of their limited contractual capacity. It is precisely for this reason that it is important to seek the advice of a reliable legal practitioner before concluding a contract with a minor or considering the transfer of real property to minors.
Feel free to contact us for further information and to discuss alternative options – aleida@rgprok.com / www.rgprok.com
Aleida Kraamwinkel, Associate, LLB (UNISA)
