Selling as an executor
The executors of a deceased person’s will are responsible for winding up the deceased’s estate and carrying out the terms of their will. Much will depend on what the deceased owned and what the beneficiaries intend to do with the property. Whatever is decided though does not have to be rushed.
If the property is registered and the person who died was the sole owner, then the Executors can assent the property to the person(s) who inherits it. If the beneficiaries under the will do not wish to have the property transferred into their names the executors will need to sell it. If the property is to be sold, then the Grant of Probate gives executors the authority to sell.
Joint tenants own the whole of the property indivisibly. Each does not have a quantified share in the Property. There are two important features of a joint tenancy.
Firstly owners are regarded as owning in equal shares. If one owner contributes more than the other toward the purchase money or will contribute more than the other toward future outgoings, the amounts that each get back may not reflect the contribution that each has made to the Property.
Secondly, if either owner dies, the survivor will own all of the Property. This right of survivorship can be terminated by either owner serving notice on the other to bring it to an end, or “severed”. If a notice of severance is served, and either owner dies, the survivor will not own all of the Property and the deceased owner’s share will pass according to their Will or by intestacy.
Married couples or those in a civil partnership commonly co-own as joint tenants because they appreciate the simplicity of the right of survivorship to make it straightforward to inherit each other's part of the property.
If the deceased was a joint owner and the partner is still alive, the death can be registered with the Land Registry using a form DJP, along with an official copy of the death certificate. Probate is not required to deal with the property but may be needed if the deceased’s estate warrants it. If the property is registered in joint names, and the other person wants to remain there, this is all that needs to be done.
If the other person wants to sell then they can do so and do not need the authority of the executors or beneficiaries under the deceased's will to do so.
Tenants in common
Tenants in common each own a distinct share in the property. The shares may be equal, but they do not have to be. Whatever the share is, it can be passed on to another person, after death by the deceased's will or by the rules of intestacy.
If the property is held jointly as tenants in common there should be a restriction in the Proprietorship Register stating that a valid receipt for purchase money must be given by at least two trustees. This means that the parties selling the property will be the survivor together with the Executors of the deceased and a Grant of Probate will be required.
Realistic time scales
The estate agent may suggest that they have a potential buyer already, or that the property should be placed on the market immediately. While there is nothing to prevent the executors from instructing agents to market the property, or even accepting an offer on it, please be aware that contracts can't be exchanged until the Grant of Probate has been obtained.
The sales process
The sale of the property then progresses as for a normal sale. However there are some differences or nuances:
Completing the Standard Forms
There is a general rule in the sale of a property that it is for a buyer to satisfy themselves with their bargain so there is very limited come back against the seller if the buyer later regrets his purchase. We know this rule as "let the buyer beware". Strictly a seller does not have to provide any information to the buyer save for details of the seller's legal ownership and it is for the buyer to find out whatever he wants to know about the property from whatever source he can find it. However, a prudent buyer will expect the seller to provide some information about the property and the seller usually provides standard information as set out in the standard forms. These standard forms will usually be a Property Information and a Fittings and Contents form that you need to complete.
An Executor should be aware, of course, that the replies that they give may be relied upon by third parties, not just the buyer of the property, but by lenders. Executors can be liable to a buyer or other party for a misrepresentation made by them, prior to the exchange of contracts, upon which the buyer or other party relies and where, as a result they suffer loss. Executors must therefore take as much care as they can to ensure that their answers are accurate and not misleading.
It may therefore be prudent for the property to be sold as seen thereby negating the need for these forms or if the forms are to be completed it is common to tick "not known" . Executors sell with Limited Title Guarantee
When someone is selling a property certain covenants on the part of the seller may be implied into the transfer document affecting the sale. A "Full title guarantee" is the best quality of title and usual unless the seller is selling as the personal representative of a deceased in which case they will sell with "Limited title guarantee":
- It is used when the seller has no personal knowledge of the property.
- It means the seller cannot guarantee that the property is not subject to any financial charges, nor can they guarantee whether there are any rights over the property or give information on what rights there could be.
- The seller is unable to confirm whether there are any covenants which may affect the property.
Executor Statement contained in the Transfer
The Transfer of the property contains a usual and reasonable clause limiting the liability of the seller due to the fact that they are Executors.
The property may not be registered at the Land Registry, particularly if it is in a rural location or if the deceased had owned it for a number of years. If the property isn’t registered, a transfer of ownership will trigger the need to register it for the first time. In this case, the executors will need to locate the paper title deeds, which may be held in safe custody by the deceased’s solicitor or bank, or they may be kept with the deceased’s papers at home.
If the property is being sold then the fact that the property is unregistered should not hold up the sale. It is common practice for the buyer's solicitors to deal with the first registration after completion of the sale has taken place.
Things to remember
The executors must also be aware that the deceased’s property will need to be cleared of all its contents before completion. This is that can be quite time consuming to achieve and emotional for those involved.
However, the main thing to remember is that when someone dies, there's usually no rush to sort out what happens with their property.
This article is taken from Private Wealth newsletter - May 2019