When the seller of a property dies after the exchange of contracts but before completion, it can be highly stressful for all parties involved – the buyer, the estate of the deceased and any other co-owners.
While it’s reasonable to assume that the sale must automatically fall through if the seller passes away, that’s actually not the case. Instead, the obligations usually pass to the personal representatives of the deceased seller and with proper advice from conveyancing and private client solicitors, the sale can go ahead.
In this article, we outline how this works under our legal system, the practical steps involved, the risks this situation can pose, and how our expert lawyers at Scott Bailey help clients who face this scenario.
Once contracts are exchanged, the buyer and seller are bound to complete on the agreed date (or within the agreed terms), as the transaction becomes legally binding at the point of exchange. In the event of the seller’s passing, the contract passes to the personal representatives (executors under a will or administrators if the seller died intestate) of the deceased seller. In summary, this means the buyer still has a contractual right to complete, and the seller’s estate may still have the obligation to proceed.
This situation will vary slightly depending on the property ownership.
Sole owner
If the deceased seller owned the property alone, then their personal representatives will be granted authority to deal with the estate and will step in. Typically, they will need to obtain a Grant of Probate (if there was a valid will) or a Grant of Letters of Administration (if there was no will) to enable them to act. Please note that if you find yourself in this situation, our private client team can help with both a Grant of Probate and applying for a Grant of Letters of Administration (collectively known as a ‘Grant of Representation’
It is worth noting that until the sellers’ representatives obtain this authority, there is a chance the sale may be delayed; however, it may be possible to move into the property under a licence whilst the Grant of Representation is obtained.
Co-owner(s)
If the property was held by more than one person (co-owners), two situations may arise:
If the co-owners were registered as joint tenants, the interest automatically passes to the surviving co-owner. That person is then able to complete the sale as soon as the death is registered at the Land Registry – if the title supports that, of course.
If the co-owners were registered as tenants in common, then the deceased’s share becomes part of their estate and passes under their will or the intestacy rules. In that case, the personal representatives will need authority and may need to be involved in the sale alongside the surviving co-owner to issue a valid receipt for the sale proceeds.
It is essential to check how the legal title is held and whether any restrictions are noted on the title that could prevent the surviving party from acting alone. If you are unsure, please do reach out to our team, who will be able to help.
What to do in the event of the seller’s death
This is a stressful and often complicated situation. To help you, we have laid out the practical steps that typically need to be addressed:
- Personal representatives step in: firstly, the executor or administrator takes on the role of the seller in the contract. They have the power to sign the transfer and other documentation. Don’t forget that without the relevant grant of representation, they may not be able to give the buyer the required documentation.
- Obtain a death certificate and notify the Land Registry: a certified copy of the death certificate will be required to update the title. The Land Registry will need evidence of the death and, in the case of tenants in common, possibly evidence of the grant of representation. Delays in registration can slow down completion, so it’s important to get this sorted quickly. We can help if you are unsure of how to proceed at this point.
- Confirm title position and restrictions: you need to be clear on how the property is held, whether there are any restrictions, and whether the survivor or personal representatives are legally allowed to proceed with the sale. If there are trustees or multiple co-owners, then you must make sure appropriate parties are appointed.
- Ensure you are compliant: although the contract remains valid, the completion date may need to be renegotiated if the personal representatives cannot comply on the original date. If the seller, or their estate, fails to complete, then the buyer may be able to claim a breach of contract and serve a notice to complete.
- Liaison between conveyancing and estate administration: this is where the overlap between property law and private client law may occur. The conveyancer needs to liaise with the personal representatives and ensure a grant of representation is being applied for and the estate administration is moving forward. If the estate is being administered and the property is part of it, timing and tax considerations may come into play (for example, inheritance tax, if applicable). Both our private client and property lawyers are on hand to help in this situation.
Risks and complications
While the law allows the transaction to continue, there are risks and practical complications that parties and their advisers must be aware of:
Delays and breach of contract
Obtaining a grant of representation can take time, and until it is done, the personal representatives may not be able to sign the relevant paperwork. If the original completion date is missed, the buyer may consider the seller (or the seller’s estate) in breach of contract unless a new date is agreed. At this point, the buyer may be in a position to serve a notice to complete, although this will depend on contract terms. We can check these terms for you.
Complicated ownership situations
If the deceased’s share is held under a trust, or there are multiple trustees, or the property is owned as tenants in common with complex arrangements, the necessary parties to the transfer may not all be available, and the situation becomes increasingly more complicated.
Financing and affecting the chain
If the buyer is in a chain and expects completion to be on a given date, delay on the seller’s side could impact the buyer’s purchase of another property, their mortgage offers, moving plans and storage/mobilisation costs. Understandably, this puts the buyer in a very difficult position.
Tax, estate liabilities and legal cost issues
The personal representatives may be required to pay inheritance tax and/or capital gains tax to HMRC following the sale of the property. They have a duty to ensure all property costs and taxes are paid before distributing the proceeds of sale in accordance with the Will or Intestacy Rules.
How we can help
As you may expect, this is a complicated situation that needs careful management. Having legal expertise across both conveyancing and private client work is a strong advantage, and we are here to help. At Scott Bailey, our experienced teams can assist whether you are acting for the buyer, the seller’s personal representatives, or as part of a co-ownership arrangement.
We identify key issues quickly, advise on the steps required, and liaise with personal representatives where grants or timetable adjustments are needed. We clarify ownership structures, confirm how the property is held, and advise on any trustee appointments or restrictions.
Our conveyancing lawyers work closely with executors so the transaction can progress promptly and correctly. If you need advice, please contact us for a confidential discussion.
Proactive, experienced solicitors by your side
At Scott Bailey, we have a long-standing reputation and over 90 years of experience acting for private clients, estates and property transactions when the sale of a property overlaps with the administration of a deceased estate. The combined expertise of our conveyancing and private client teams can help to bring peace of mind and structure to a very stressful situation.
