I have been offered a contract for a purchase which includes a ‘record of death’ clause:- 'a. This contract is subject to and conditional upon the registration of a Record of Death in favour of the seller on or before the settlement date. In the event that the registration has not been effected by the settlement date then the seller may at their option extend the settlement date in the contract for a period of 30 days to enable registration to take place b. in the event that the registration has not been effected by the extended date for settlement then his contract shall be at an end and all deposit monies paid shall be refunded to the buyer.' The sellers spouse deceased some time ago and 'record of death' clause is to transition the title into the sellers name only. The contract is 60 days + option of 30 days extra for 'record of death' completion if required. If record of death has not been completed by the seller after 90 days then the contract is terminated. This puts me in the odd position of being locked into the contract from my side unconditionally for 3 months but the seller has an escape clause which can be invoked by simply failing to complete the 'record of death' action. I am not sure if the will has been executed so I am not sure if there is the possibility that the will could be disputed. I think this is unlikely but still a nagging doubt. I would like to add a clause that requires confirmation that the will is executed and that it leaves the property title to the seller. I would also like to add a clause preventing any further marketing or viewing of the property while it is under contract since, if they get a better offer then they could use the escape clause to get out of the contract. I have googled up some links to Record of Death clauses. Gold Coast Lawyers - Gold Coast Affinity Conveyancing Special Conditions - Affinity Conveyancing Lawyers Contract Clauses -Special Conditions Anybody have any experience of Record of Death clauses and how to handle them from a buyers perspective?
To counterbalance the Record of Death clause, is there anything requiring that the vendor use their best endeavours to achieve this outcome?
I can't advise from a buyer's perspective, but we are just going through a very similar process right now for selling my Mother's house. We were offered a contract to purchase which had a special condition requiring 'registration of ownership' by a transmission of death. My father passed away last year, and we haven't fully tidied up the will. I guess they are just ensuring that my Mum has full ownership to ensure the transaction can occur smoothly. If they are wanting to sell the property, I don't know why they would make this transfer difficult - it has to happen some time for them to execute the sale to anyone. The issue that may arise is if it's either held as Joint tenants or tenants in common. I am no lawyer, but our conveyancer explained to me that as joint tenants, the property automatically transfers to the surviving spouse. All that is required is some simple form to be lodged, and it only takes about 2 weeks (only took about 9 days for us) - the will doesn't need to be fully settled. Different process if tenants in common, I believe. Maybe insert something like that 'best endeavours' clause in your first link. In my experiences, agents will want to continue to market the property until it is unconditional, and then often even longer after that so they can generate more leads!
What is the definition of 'record of death'? It is capitalised so probably defined. Sounds like it is subject to the granting of probate. This may help Legal Tip 141: Buying a property subject to Probate Legal Tip 141: Buying a property subject to Probate If a will hasn't been executed it could still be admitted to probate. Or someone could apply for administration of the estate. But there could be delays and disputes. I advised a client on one and told him to ask for a 12 month clause. In the end it took about 10 months and if he had signed accepted their 6 month clause they may have pulled out and resold the property as it had jumped by about 10%.
I was thinking of adding the suggestion in the 2nd link:- (c) The Seller Agrees to all things reasonably necessary to effect the registration of the Request to Record Death/Transmission Application as soon as possible. That sounds good. My 2nd link says it normally takes at least 3 months, That does not sound so good. That is exactly my worry. They have accepted a low cash offer but they have an out so a better offer from anopther buyer could have them using the out. I was thinking of adding:- (d) the seller agrees to cease all marketing and viewing of the property
This looks quite good:- I would make it more than 7 days though just to allow for cash transfers. DECEASED ESTATE - bytherules
Here is my revised version of the clause. Any feedback on wording would be much appreciated. 1. RECORD OF DEATH a. This contract is subject to and conditional upon the registration of a Record of Death in favour of the seller. The buyer must be informed in writing 15 days prior to settlement that this registration has occurred. b. The seller agrees to do all things reasonably necessary to effect the registration of the Record of Death as soon as possible. c. In the event that the registration has not been effected or communicated by the due date then the settlement date shall be extended to enable registration to take place. In the case of an extension being required the settlement date shall be 15 days from the date of the seller communicating the registration of Record of Death to the buyer. d. in the event that the registration has not been effected within 90 days from the date of contract then the buyer shall have the right to terminate the contract and all deposit monies paid shall be refunded to the buyer. e. in the event that the registration has not been effected within 360 days from the date of contract then the seller shall have the right to terminate the contract and all deposit monies paid shall be refunded to the buyer. f. the seller may not market the property or allow viewings of the property to other potential buyers while this contract is in place. g. online and roadside advertising must show the property as either 'sold' or 'under contract' while this contract is in place
