What happens if the Buyer Dies during a Purchase Transaction

Death of Sole Buyer

Upon the death of the buyer, the Personal Representatives (PRs) effectively  take on the role  and responsibilities of the buyer. If contracts have been exchanged then the PRs are bound to complete, however, they must wait until a formal Grant of Probate has been issued. This can sometimes take weeks or months, but a special request can be put in to the Probate Registry for matters to be dealt with on an expedited basis due to exceptional circumstances.

 

Did the Deceased apply for a Mortgage?

Where the deceased buyer applied for a mortgage to assist with the purchase, the PRs will have to notify the lender and assess whether the mortgage has to be withdrawn on the basis of a change in circumstances. For example, the buyer may have intended to live at the property once it was bought which will obviously no longer be the case. This could put the Personal Representatives in a difficult position where contracts have been exchanged since they are still contractually bound to go ahead with the purchase even though there will be serious funding problems due to there being no mortgage. If they fail to complete then the Seller may claim compensation and the deposit  paid by the buyer may be forfeited. The best solution in this case would be for the PRs to obtain a written release from the seller.

 

Death of a Joint Buyer

Where the contract has been entered into jointly, the surviving buyer may be forced to complete if the co-buyer dies. The joint buyers obtain an equitable interest in the property once contracts are exchanged.

 

If the surviving buyer wants to withdraw from the purchaser (and he is solely entitled to the property) then he may do so on the basis of a written release from the seller. In the absence of this, if he fails to complete, compensation and damages can be claimed against him.

 

It should also be noted that the deceased’s share in the property may have passed to someone (other than the co-buyer) under their Will or under intestacy rules, upon death. In such a case it is practical for the share in the property to be transferred into the names of two trustees on completion while distribution of the Estate’s assets is finalised.