When a person dies all their interest passes to an Estate referred to as the “Deceased Estate”. The deceased estate has no power to transact anything until the Court has appointed an Executor or an Administrator. This is often referred to as Probate.
This means that, a Real Estate Agent cannot enter into an Agency Agreement with the living person until probate is granted. Even if it is a “joint tenancy”, and Probate is not necessary, the living person cannot sign on behalf of the deceased person until the property is transferred into the living person’s name.
Leverage has just been involved with a situation where the living person was advised that the bank would manage the transfer. She executed an Agency Agreement and a Contract for Sale whilst the property was registered in both the living and the deceased’s persons name. The Bank failed to lodge the Notice of Death and transfer the property into the living persons name.
We now have the potential problem of an Agency Agreement being in breach of Section 55(1)(a) of the Property and Stock Agents Act 2002, putting the Agent in the position where his commission may be in jeopardy.
Initially, we had the difficulty of exchanging a Contract because the Purchaser’s Conveyancer is concerned about the transfer of property.
When dealing with a Deceased Estate, it is vital that agents communicate with the Solicitor handling the probate and not be caught by other persons advising the Vendor.
There is no purpose in listing a property when you automatically put yourself in a position of losing commission.