VENDOR DIED AFTER EXCHANGE

Hello Folks,
Buying a house in Tasmania, the vendor died after signing the contract and shortly after we paid 10% deposit and contracts were exchanged. We still wish to purchase the house but the estate goes to probate & the High Court of Tasmania - 'if all goes well, 2-3 months'. The property would have settled today but is now out to May or June (at least...although we are being assured probate is 'progressing well'). Beneficiaries refused our request for 'early possession' under the circumstances (faultless, Covid, homelessness, interstate move booked, good references).
My question is who is the contract between, now? What happens at 'settlement' ie. do the beneficiaries inherit the property or our payment? How secure is our purchase (against, I'll call it, 'gazumping') in the hands of the beneficiaries? How would they be penalised if they pulled out of the contract (purchasers lose their deposit)?
Thanking you,

 

What does your solicitor say? And what does the contract say?

 

Your contract is with the deceased. Their assets vest to the state until an executor is appointed. What does your contract say about pulling out? It is likely they can pull out without penalty.

 

If the Tasmanian market is as hot as other capitals, then this may be likely.

 

you should concentrate on getting your 10% back.

Buying from a dead person seems risky to me.

 

The executor will, in due course, become liable for choosing between settlement or cancellation and refund of any deposit. Your soliicitor should commence making enquiries of their intention as they may become liable for costs through extended delays but until probate occurs then that likely not a matter they can become liable for. The family may, or may not, see it as a matter that is inevitable and its easier to complete than fiddle about.

The vendor could stitch up the agent by asking if you wanted to make a new contract with the executor. The agency agreement is not enforceable if a new contract is made perhaps ? You may even find that the family stitch up the agent and make a new contract for the same price and you still get what you were after and they save costs. It depends on their charecter and the legal advice they get really. It may be something they dont care about too. Loads of deceased sales progress.

 

No, It isn’t, you are buying from his estate. I had this happen to me and stayed the distance. End result is I sold the property a few weeks after settlement for a 22% profit on the sale price. It was actually 220% on the deposit I put down 13 months earlier.

 

I think there is no problem buying from an estate.

From what i can gather the OP bought from a person and then that person was deceased. I guess that in my small brain translates to buying from a dead person.

The risk i can see is related to the expectations of the beneficiaries which may differ from the original owner prior to death. There may be grief, suspicion anger, all the human emotions. I have a very small brain and all i would be able to see is risk. So if it was me i would gracefully back out.

I never think money is the be all and end all of all behavoirs and transactions. There are ppl involved.

 

The beneficiaries may see it as a benefit that there already is a committed buyer ie quicker and guaranteed access to the proceeds.

But I guess you'll have to endure due process if it takes x months.

 

"...the obligation of the contract passes on with the estate..." The contract is the REIT Standard Form Contract (Tasmania + Standard Conditions of Sale 2018) without much departure from standard completion [vendor warranty 'without qualification', building inspection clause satisfied.

 

Thank you Paul.

 

There is very little written anywhere about compensation from a Vendor not completing, and nothing in the Contract. zandelaw provided this "...protection for the Buyer sits outside the contract in old legal principals available in common law and equity..." ie. damages.

 

The Tasmanian market leads the country, hence my concerns - particularly with the time frames involved...

 

Tasmanian property laws are different to other states .

We had a purchaser indicated they didn't wish to proceed due to mental health issues . Signed contract , deposit paid . Our only way to enforce was to take her to court , but no guarantee we would win or get deposit ...

I would be getting legal advice from Solicitor in Tasmania , not conveyancor . Any thing else is guesswork .


Cliff