Exchanged contracts but the seller has died – what happens now?

Thankfully, this situation does not occur very often. However, it can lead to confusion for buyers when it does.

Once contracts have been exchanged, there is a binding contract between the buyer and the seller.

The death of one of the parties does not change this but ultimately, it will be the personal representatives or administrators of the deceased person's estate who have to fulfil the obligations of the person who has died.

What happens next?

The executors - if the person who died had made a Will, or the administrators if they hadn't - should complete the sale of the property to you on the date agreed when you exchanged contracts.

But, they can't do this until they have obtained a Grant of Probate (or a Grant of Representation when the deceased left no Will) which gives them legal permission to deal with the deceased person's assets.

Technically, if an owner has died, the executors have authority to act in the estate of the deceased immediately following death as the authority of the executor is granted by the Will of the deceased.

However, it is unlikely that a buyer would be advised to proceed until a Grant of Probate confirming the authority of the executor is obtained.

Complexity

The speed at which this can be done depends on the complexity of the estate involved but 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 the 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.

Possible complications

If the deceased owned the property being sold with another person as joint tenants, the surviving owner can continue to sell the property (when the death certificate is available)

If the deceased owned the property being sold with another person as tenants in common, the surviving owner can continue with the sale of the property, but the process will be more involved as an additional person (acting as a trustee of the deceased person's estate) will need to be appointed in the document that transfers ownership to the buyer.

Although, if the deceased's share in the property was left to the survivor in their Will then the surviving owner can apply to the Land Registry to remove the restriction (which would be set out on the title to the property if it is registered with the Land Registry and the property is owned as tenants in common) and the name of the deceased from the title so that the survivor will be the sole owner and can continue with the sale.

If you need help with any conveyancing issue, please contact Wards Solicitors' specialist Conveyancing team.