Selling house: seller dies between exchange and completion

Allan

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Mar 21, 2013, 11:50:02 AM3/21/13

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As the title, what would one expect to happen? What are the options?

[We are trying to sell my Mum's house. The buyer is dragging his heels
since about January. Mum, elderly, 91 this week, has been diagnosed
with terminal inoperable cancer, and is now on palliative care in a
nursing home. We're hoping to get to exchange soon, but what happens if
Mum dies after exchange and before completion. Do the exors have to
wait until probate to complete etc. Is the contract no longer a contract?]

The Todal

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Mar 21, 2013, 12:30:02 PM3/21/13

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The contract remains binding but the seller's personal representatives
cannot validly complete until a grant of probate or letters of
administration have been issued.

The buyer will obviously expect to occupy the premises on the completion
date and may be greatly inconvenienced if he is told he cannot do so. I
think in that scenario it is usual to let the buyer occupy the property
(to avoid having to pay him damages for breach of contract) subject to
various undertakings being given.

Having said that, do ask your solicitor/conveyancer and make sure he is
geared up to dealing with this potential problem. He may say it would be
better to delay exchange of contracts.

Dr Zoidberg

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Mar 21, 2013, 12:50:02 PM3/21/13

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"Allan" <inv...@invalid.invalid> wrote in message
news:ar0ogk...@mid.individual.net...

Not a great situation to be in :0(

This suggests that the sale should still go ahead.
http://www.healys.com/site/srvprivate/conveyancing_solicitor/conveyancing_further_information/residential_conveyancing_and_death_of_a_party.html

--
Alex

John Briggs

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Mar 21, 2013, 3:30:05 PM3/21/13

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I would say that your Mum only has to be alive at the time of the
exchange. Surely a subsequent death would only be a problem if she was
buying? Don't freeze the bank account until you have received the money...
--
John Briggs

Message has been deleted

GB

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Mar 22, 2013, 5:30:04 AM3/22/13

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On 21/03/2013 16:30, The Todal wrote:
> On 21/3/13 15:50, Allan wrote:
>> As the title, what would one expect to happen? What are the options?
>>
>> [We are trying to sell my Mum's house. The buyer is dragging his heels
>> since about January. Mum, elderly, 91 this week, has been diagnosed
>> with terminal inoperable cancer, and is now on palliative care in a
>> nursing home. We're hoping to get to exchange soon, but what happens if
>> Mum dies after exchange and before completion. Do the exors have to
>> wait until probate to complete etc. Is the contract no longer a
>> contract?]
>>
>
> The contract remains binding but the seller's personal representatives
> cannot validly complete until a grant of probate or letters of
> administration have been issued.

Surely, the problems you outline arise where the death is not anticipated?

In this case, death is, sadly, anticipated. Is it possible for mum to do
something now to alleviate the problem?

For example, change the legal, but not the beneficial ownership of the
property?

Or, if she is now in a nursing home, why not gift her house to her heirs
now? That won't change the IHT position, and won't change CGT
significantly, but it means that they can deal with the sale.

>
> The buyer will obviously expect to occupy the premises on the completion
> date and may be greatly inconvenienced if he is told he cannot do so. I
> think in that scenario it is usual to let the buyer occupy the property
> (to avoid having to pay him damages for breach of contract) subject to
> various undertakings being given.

That seems an awful mess, and it would be best to avoid it if possible.

>
> Having said that, do ask your solicitor/conveyancer and make sure he is
> geared up to dealing with this potential problem. He may say it would be
> better to delay exchange of contracts.

Possibly, but that is very uncommercial. What about the suggestions I made?

The Todal

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Mar 22, 2013, 6:50:02 AM3/22/13

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Delaying exchange would seem a bad option to me. On the other hand, some
conveyancers are very skilled at doing an exchange and completion on the
same day. Gear everything up, get the seller to sign the forms and then
set a date. I would hope that even if the seller dies that very morning
it shouldn't be a problem.

It may be that an experienced conveyancer will have encountered the
situation many times and will have some stock undertakings or other
forms that ensure a seamless completion without anyone having to go into
bed and breakfast accommodation while probate is applied for.

Stuart A. Bronstein

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Mar 22, 2013, 12:45:03 PM3/22/13

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GB <NOTsomeone@micro

>>
>> The contract remains binding but the seller's personal
>> representatives cannot validly complete until a grant of
>> probate or letters of administration have been issued.
>
> Surely, the problems you outline arise where the death is not
> anticipated?
>
> In this case, death is, sadly, anticipated. Is it possible for
> mum to do something now to alleviate the problem?

> For example, change the legal, but not the beneficial ownership
> of the property?

Well, yes, that is a possibility. She could transfer the property to
a trust, and appoint someone else as the trustee either now or if she
should die.

The question is whether that would be worth the trouble and cost as
opposed to having to await for a fairly brief time until letters of
administration are issued.

--
Stu
http://DownToEarthLawyer.com

GB

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Mar 22, 2013, 2:55:01 PM3/22/13

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That can take several months, which is an aeon in terms of a property
transaction.

Stuart A. Bronstein

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Mar 22, 2013, 3:50:02 PM3/22/13

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GB <NOTso...@microsoft.com> wrote:

>>> For example, change the legal, but not the beneficial
>>> ownership of the property?
>>
>> Well, yes, that is a possibility. She could transfer the
>> property to a trust, and appoint someone else as the trustee
>> either now or if she should die.
>>
>> The question is whether that would be worth the trouble and
>> cost as opposed to having to await for a fairly brief time
>> until letters of administration are issued.
>
> That can take several months, which is an aeon in terms of a
> property transaction.

Thanks for the information. In California I could set the whole
thing up in 24 hours. But on the other hand probate is much more
bureaucratic here.

--
Stu
http://DownToEarthLawyer.com

GB

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Mar 23, 2013, 3:50:02 AM3/23/13

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To get a grant of probate here, you need to make a full statement of the
assets and pay any tax due first. That obviously takes a while to do.

R. Mark Clayton

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Mar 24, 2013, 9:35:02 AM3/24/13

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"Allan" <inv...@invalid.invalid> wrote in message
news:ar0ogk...@mid.individual.net...

This happened with my uncle.

IIRC the contract was completed, but the proceeds stayed in clients' account
until probate etc. was sorted out.