During the administration of an Estate, one of the main responsibilities of an Executor or Administrator will be completing the sale of any properties in the Estate. If the deceased has left a Will i.e died testate, then the Executor will have a duty to ensure that the property is sold at the best price. The Executor should not sell the property at an undervalue for their own benefit; for instance, selling the property to a friend or family member at less than the market value of the property. The same principle will also apply in circumstances where the deceased did not leave a Will i.e., died intestate. An Executor can be held personally liable should they fail to fulfil their Executor duties and responsibilities properly.
After an offer made by the buyers has been accepted by the Executor sellers and, solicitors have been instructed, as part of the conveyancing process, the sellers will be asked by their solicitor to complete standard conveyancing protocol forms such as Fittings and Contents and Property Information forms and to answer any enquiries raised by the buyers’ solicitors. It is appreciated that often, the Executor(s) would not have lived in the property being sold, and therefore will have limited or virtually no knowledge of the property. In these circumstances, the sellers must be truthful in their replies and state in their replies to the relevant question what is ‘not known’.
There are also circumstances where the owner of the property lived in the same property for a significant period of time and therefore purchased the property prior to the requirement for registration of properties. Here, the transfer of ownership would trigger First Registration (a legal process whereby an application is made to create a title number for a property at HM Land Registry). Therefore, it would be the seller’s responsibility to gather any original title deeds and/or documents pertaining to the chain of ownership of the property. The deeds will then form part of the Contract pack which would be forwarded to the buyer’s solicitors for their First Registration application. However, during the Estate administration process, the Executors may wish to instruct conveyancing solicitors to deal with the First Registration aspect prior to the property being sold.
Once all enquiries have been satisfied by the buyer’s solicitors, the next stage in the transaction would be exchange of contracts; here the parties commit to the transaction so that it becomes legally binding. However, prior to exchange of contracts in a probate sale, the sellers’ solicitors must be in receipt of the Grant of Probate. It is vital that the Grant of Probate is available prior to exchange of contracts, as the Grant provides the authority for the Executors to sell the property in their capacity of Executors, as well as their ability to undertake their overall duties in the Estate administration. Prior to exchange of contracts, the executors will have to also ensure that the property is in vacant possession as this will be one of the conditions in the sale contract.
After exchange of Contracts, solicitors for each party in the transaction will prepare for completion i.e., when the balance of purchase funds are transferred to the seller’s solicitors. In relation to the net proceeds of sale, executors should have a separate ‘executor’ account or joint account in the names of all the executors.
Following completion of the property sale, the Executors may have to consider any tax implications such as Capital Gains Tax payable following the sale of the property.
If you wish to get in contact with a member of the Residential Property Department or Private Client Department, then please do contact us on 0118 958 9711 or info@barrettandco.co.uk.
