The special conditions in the Contract for Sale will deal with this issue.
Sometimes there is a special condition in the Contract to the effect that if either party dies or becomes mentally ill between exchange and settlement then the other party can rescind the Contract, and the Purchaser gets their deposit back, and the property goes back to market once the Vendor has dealt with the transfer of the property to either their estate (in the case of death) or the Attorney steps in (in the case of mental illness and/or loss of capacity).
It is important to note however that absent any special conditions in the Contract dealing with this issue of death the Contract will remain binding on both parties.
In the event of the Vendor’s death:
- The Contract does not automatically rescind. The Executor or Administrator of the deceased Vendor’s estate is responsible for completing the sale.
- The Executor must obtain a grant of probate or letters of administration to have the legal authority to deal with the deceased’s estate, including the sale of the property.
- The Purchaser will pay the balance of the purchase price to the Executor or Administrator, who will then transfer the property to the Purchaser.
- The process may take longer due to the additional legal steps involved.
In the event of the Purchaser’s death:
- Similarly, the contract remains binding. The deceased Purchaser’s estate is responsible for completing the purchase.
- The Executor or Administrator of the Purchaser’s estate will need to handle the completion of the transaction.
As you can see, the drafting of the special conditions in the Contract for Sale is crucial to ensure all worst case scenarios (including death) are covered.
If you or someone you know are looking at selling or buying a property give us a call today on 02 4627 3333 so that we can provide you with advice you need right at the time you need it.
This article was published on 06/08/25 and the information is valid as at the date of publishing. This article is general in nature and is not and should not be considered or relied on as legal advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.
