Death of a Vendor – What now?
What happens if between the time of signing the contract but before settlement, the vendor or one of them dies ? Rest assured it does and can happen. In this event the rights of the deceased Seller pass to his/her personal representative. The contract remains on foot and the Seller’s personal representative is obliged to complete the contract on behalf of the deceased Seller and most importantly, provide instructions to the solicitor.
How the matter proceeds will depend on whether the vendor had a will at the time of death.
If a will exists
If there is a valid will, then the personal representative will be the executor named in the will and he/she may provide instructions to the solicitor moving forward. That said, the executor will still need to apply for the property to be transferred into their name as personal representative before settlement. either by using the will directly or applying for a Grant of Probate with the Supreme Court of Queensland.
If no will exists
If there isn’t a will in place, the process is trickier and will take longer to resolve as there isn’t a nominated personal representative to automatically assume the deceased Seller’s rights. The deceased is said to have died intestate and a whole different set of rules will then apply as to how the matter is dealt with. A related person, usually a family member of the deceased, will be expected to apply to the Supreme Court of Queensland for a Grant of Letters of Administration in order to administer the Seller’s estate.
In general, the solicitor’s retainer is suspended during this period as no one has the authority to provide instructions to the solicitor on behalf of the deceased Seller.
Expect delays to settlement
Due to the lengthy process of obtaining a Grant with the Supreme Court of Queensland, the personal representative may not be able to settle on the contracted settlement date and the Buyer may choose to terminate the contract..
Although the Seller’s death is generally unpredictable or unexpected, if a Seller is terminally ill when entering into a contract , it is prudent to insert a special condition in the contract that provides the Seller’s personal representatives with the right to extend the settlement date to allow sufficient time to complete the transmission process.
What you should do
If you are a buyer, then you have the option of either terminating the contract if the vendor is unable to settle on the due date or liaise with the personal representative to extend the settlement date until the paperwork has been taken care of.
If you require further legal advice in relation to the death of a party in a property transaction or our assistance in drafting the relevant special condition to be inserted into the contract, do not hesitate to contact our property team at McLaughlin & Associates Lawyers. We’re here to help.
If you need assistance, please do not hesitate to contact McLaughlin & Associate Lawyers on phone 3808 7777 or email us at firstname.lastname@example.org.