Vendor Bid; and/or purchase

I am executor for my dad and thus the vendor for his former house - it will probably go to auction (for valuation reasons as there are siblings involved). Title has been transferred to my name already.

If I am interested in buying the house in my own name (or jointly with my spouse) at the auction, is that counted as a vendor bid? So I would be limited to two (I think) bids? What if my spouse bids on our behalf?

What about the agent commission - would that be payable since they obviously did not introduce me to the property?

Finally - Stamp duty - would that be payable if "I" or "we" bought it as "I" already own it; or alternatively "we" would require only a part transfer to my spouse?

The property & I are in NSW.

 

Hi qak,

Taken straight from the NSW fair trading website.

Co-owners and executors

A co-owner, executor or administrator or someone bidding on their behalf, may make more than one bid to purchase the property as long as:

• this is outlined in the auction conditions
• the auctioneer has announced this before the start of bidding at the auction
• the auctioneer announces before the start of the auction, the bidder registration number of any co-owner, executor, administrator, or someone bidding on their behalf.

So this would be considered a "vendor bid" but you need to make sure it is clearly stated.

As for Commission, the agent is retained to get the best price possible for your fathers estate, if it goes to auction and there are more than yourself bidding I would say the agent has done its job and deserves to be paid.

I see no reason why you would get out of paying stamp duty however I am not familiar with NSW stamp duty rules. View it as though you own it as trustee of your fathers estate not for your own benefit or use

 

Maybe dutiable but incapable of stamping and imposing the duty if there is no change of legal owner. It gets stamped for $0 for land transfer only. Depends on the value but the accepted process is to submit it - they refuse and you walk away saying Oh well I tried. Its legal avoidance. Your solicitor can clarify.

 

What will your siblings think if you buy the house?

 

Yes, the title is in my name as I am the executor.

I've got cold feet now, want to sell!
I don't think I have the patience to deal with the work required ...

 

Yes I believe that this would trigger stamp duty, but there is a way to do it without stamp duty which may or may not be possible depending on the situation.
Seek legal advice.

 

Land titles law doesnt allow a trustee interest to be on title. So a trustee legal ownership and a beneficial interest cant be ascertained. How does title transfer occur ? Only some states address the issue

 

It is not that the land titles office doesn't allow it, but it is prohibited under the real property act. But a transfer is not always needed for stamp duty to be triggered - e.g. a subsale, a declaration of trust.

I don't know enough about this area off the top of my head but where the executor is a beneficiary under the will there may not no stamp duty as this may be an appropriation.

But imagine the situation where the executor is not a beneficiary under the will. There must be stamp duty if they were to buy the property. But I don't know what section of the duties act would apply to this.

 

I have to be careful what I say here but LPI will process a transfer that cant be stamped but wont process one that can be stamped until it is stamped. The trick is to present a undutiable transfer Depends on state and property value.

 

We have just been through this with my Mum's house. The house is not in our names as such. The Property Title has been transferred over to me and my sister (we are the two executors) as Personal Representatives. That is, it has both our full names and then the words "Personal Representatives" on the Title.

Before doing this, we had to check out whether Probate was applicable. If it is, one needs to go through the Supreme Court first. In our case it wasn't (due to some work done prior to Mum passing), so we could go straight to DNRM to get the Title transferred. No S/D was required for this transfer.

Now that our names are on the Title as Personal Representatives, we can sell the property. Also, we had to take out building and contents insurance as my sister and I are liable for these until the house is sold. Interesting learning experience.

This is the way I understand it works in Queensland; other States could be different.