Buying a House but the Seller Has Died Before Completion – What Happens Now?

This is a situation that thankfully does not occur very often. However, when the owner of a property dies part way through the selling process, it can lead to confusion for buyers.

If contracts have been exchanged and a seller dies afterwards then this does not invalidate the contract. There is still a contractual obligation to complete the sale and it will be the Personal Representatives or Administrators of the Deceased person’s estate who must fulfil the obligations of the person who has died.

How does it work?

If the seller was the sole owner then the Executors or Administrators will need to obtain a Grant of Probate / Letters of Administration (Grant) to complete the sale of the property. This gives them legal permission to deal with the Deceased person’s assets.

A delay in obtaining the Grant can mean that the sale does not complete on the day that the contract says it should. If the completion date is missed, a breach of contract will have occurred for which the seller may be liable to pay compensation or damages in accordance with the terms of the contract.

The Probate Registry does operate an emergency system to expedite the Grant of Probate or for a limited Grant of Probate to be issued. This may be used to enable to sale of the property to take place with minimum delay.

If probate is unlikely to be granted before the fixed completion date and the matter is uncomplicated, the Executors may agree to allow the buyer into the property on licence pending formal completion. This depends on the advice they receive from their conveyancer which would vary depending on the circumstances.

What if there is more than one owner of the property?

If the Deceased person owned the property with someone else as joint tenants – so each owner holds the legal title and a 100% share of the property – then the co-owner can still sell the property, when a Death Certificate is available.

If the Deceased person owned a property with someone else as tenants in common – so all owners hold the Legal Title but the property’s equity (value) was held in shares, then the co-owner(s) can still sell the property. However, the process will be more involved as the Land Registry will not let the co-owner sell on their own share of the property when the other has died – in order to protect the Deceased co-owners share. The surviving co-owner will need to appoint an additional Trustee to sell the property and both are under a duty to pay correct amount of money from the sale to the Deceased’s co-owner’s estate, giving a valid receipt.

What happens on completion?

  • For properties where the Deceased was the sole owner – 100% of the net proceeds of sale are paid into the Deceased’s Estate.
  • For properties that were held as Joint Tenants – all of the net proceeds of sale go to the surviving co-owner.
  • For properties that were held as Tenants in Common – the net proceeds of sale are divided in accordance with how the shares in the property were held. The deceased’s share is paid into their Estate.

If you would like to discuss any points in this article further or are looking for legal advice relating to buying or selling a property, please contact Spire Solicitors LLP on 01603 677077.