Does Death Bring an End to an Agency Agreement?  By Bailey Compton 10 Oct 2023

Last Friday I was dealing with an event regarding the sale of a property where a person had passed away.

The agent’s sales agency agreement was executed prior to the passing of the gentleman.  What made it more interesting is that the deceased person’s commitment to the agency agreement was executed by the Power of Attorney.

It should be noted in the first instance that, Powers of Attorney die upon the passing of the individual.  A Power of Attorney is a valid document only when the person is alive.  After a person’s passing, the Will becomes the legal document.

The law relating to Contracts is clear in relation to a deceased estate.  All legal rights and liabilities convert to the deceased estate when a person passes away.  In other words, the agreement is still alive although the person has passed.  The sales agency agreement which had the deceased person’s name on the agency agreement was still valid.

 

Some wish to charge out and sign a new sales agency agreement with the remaining partner or the Executor of the Estate.  If you have a valid sales agency agreement, do not change it.  It is legally binding.  There is no benefit in getting the remaining spouse or the Executor to sign an agreement until after Probate.  There is no power in a partner or an Executor until the Court has created a Probate.  I will continue to talk about the issues surrounding an agent’s responsibilities in a deceased estate.

It must have been one of those weeks!  We also received a request for advice from one of our clients who was managing a deceased Estate.  They had been managing this property for many years, and wondered if they would be able to rely on the managing agency agreement previously executed.  We obviously said “yes”.  The managing agency agreement is valid and remains valid until the property is transferred.

 

This last point is important!  After Probate, if the property passes on to the beneficiaries, the Landlord on your managing agency agreement has now changed.  It is at this point; you need to change your managing agency agreement.

Contracts outlive a person’s life.  Therefore, an agency agreement will remain in force until a new owner is listed on New South Wales Land Registry.