breach of auction completion date?

inneed

After a year of trying to sell my fathers non standard construction house to pay for his care home fees, and 4 failed sales, we have entered it in an auction. My father, who is 99 has now developed Covid.  We know that if he was to die between sale and completion we would not be able to complete on time, as we could no longer act as LPA, and it would mean probate. Does anyone know what the consequences of this would be for us? The thing is, if we pull out of this sale, it will be an on going worry, as at 99, with ill health and dementia, he could die at any time. We are in such a quandary, and really don't know what to do. Thanks.

AdrianC

Once exchange occurs - which, in a normal auction, it does on the hammer - the sale would be legally bound to complete.
Yes, LPA ceases to apply... but somebody takes over as executor or administrator instead, and they would use that legal authority.

If he dies pre-auction, it's a greyer area. If there's zero risk of any contention amongst beneficiaries of his estate, I'd be tempted to leave it in the auction.

inneed

AdrianC said:

Once exchange occurs - which, in a normal auction, it does on the hammer - the sale would be legally bound to complete.
Yes, LPA ceases to apply... but somebody takes over as executor or administrator instead, and they would use that legal authority.

If he dies pre-auction, it's a greyer area. If there's zero risk of any contention amongst beneficiaries of his estate, I'd be tempted to leave it in the auction.

Thanks for your quick reply! I understood that the sale would not be able to complete until probate had been completed. The same people who have LPA are executors

davidmcn

You would need to first get probate before you could convey a valid title. But given how one-sided auction contracts tend to be, I expect you could add a special condition permitting the vendor to walk away without penalty in that scenario. Would a buyer be all that bothered as long as they got their deposit back?

eddddy

As davidmcn says, instruct your solicitor to add a special condition that cancels the contract, if the vendor dies.

You could also state in the listing that you are happy to complete in less than 28 days after the auction, by agreement, if buyer and seller are both ready. To reduce the risk.

(I completed an auction purchase in about 10 working days on one occasion, instead of the contractual 4 weeks, because both solicitors were ready. There's not much legal work that needs to be done. But conveyancing solicitors seem to be very busy at the moment, so see what your solicitor says.)

greatcrested

Yes - we are assuming that you are named as Executer in dad's will, so your executer role would take over from your POA role immediately on death.

But as excecuter you'd need Probate in order to sell.

Special condition seems to be the way to go.

(also assuming dad is sole owner)

peterhjohnson

Interesting. I was once told by a solicitor that once exchanged, I was definitely going to buy the property, even if I died

davidmcn

peterhjohnson said:

Interesting. I was once told by a solicitor that once exchanged, I was definitely going to buy the property, even if I died

Well, your estate would be contractually bound to complete. Obviously in practice, it's unlikely your executors would be ready and waiting with sufficient cash to hand over on the completion date, but the contract doesn't vanish in a puff of smoke just because either party drops dead.

inneed

Sorry for the long post. The solicitor has just done this:-
SPECIAL CONDITIONS 1. 1.1 This Agreement incorporates the Standard Conditions of Sale (5th Edition – 2018 Revision). Where there is a conflict between those Conditions and this Agreement, this Agreement prevails. 1.2 The terms used or defined in this Agreement have the same meaning when used in the Conditions. 1.3 The Chattels on the Property as set out on any attached list are included in the sale and form part of the purchase price save where otherwise stated. The sale excludes those fixtures which are at the Property and are indicated on the attached list as excluded if any. 1.4 Subject to the terms of this Agreement and to the Standard Conditions of Sale, the Seller is to transfer the Property either with full title guarantee or limited title guarantee as specified on the front page for the purposes of Condition 4.6.2 1.5 The Property is sold with vacant possession on completion or subject to any tenancies or leases disclosed 2 The Standard Conditions of Sale (5th Edition) shall be varied as follows: 2.1 Where either party fails to complete on the Completion Date then the defaulting party shall pay the costs of serving a Notice to complete under Condition 6.8, being £100 plus VAT and Condition 6.4 shall be amended accordingly to include the aforementioned costs. 2.2 The defaulting party will pay interest on the Sale price at the Law Society interest rate. 2.3 Conditions 6.1.2 and 6.1.3 shall take effect as if the time specified in them were 12.30pm rather than 2:00pm. 3. The Seller is not required to transfer the property to anyone other than the Buyer. 4. The Buyer will pay to the Auctioneers or as the Seller directs the Administration Fee of £1200.00 (inc of VAT), as shown in the catalogue and on the details. 5. The Buyer will refund to the Auctioneers on the date this contract the sum of £400.80 including any VAT payable being the costs of all searches and documents obtained in the course of the sale. 6. I/we consent to this sale; and undertake that the Property shall be released from such rights and interests as I/we may have over the Property as from the date of sale; that I/we will vacate the Property on or before the Completion Date; acknowledge that the effect of this Clause has been explained to me/us and that I/we have been advised of my/our rights to have independent legal advice and authorise payment of the purchase price to the seller. SIGNED (Occupier)........................................................................................................................... NAME(S)..........................................................................................................................................
 7. Conditions 2.1 – 2.3 will not apply if the Buyer or Seller are unable to complete on the Completion Date because one or more of the following Delay Event conditions apply: - a. the Buyer or Seller, or an occupier of The Property, is ill or dies with coronavirus or is self-isolating due to the COVID 19 outbreak; b. essential services suppliers (e.g. removal services, HM Land Registry providing pre- completion searches, utility connections) are using their best endeavours to comply with the UK Government guidance, requirements or restrictions relating to Coronavirus (including but not limited to the Regulations) where their resulting actions or non-actions prevent the Buyer or Seller effecting legal completion; c. the UK financial system (or a relevant part of it) fails to deliver the balance of purchase monies to the Seller on completion as required to effect legal completion of this sale and purchase as a result of issues relating to Coronavirus; d. any failure to deliver funds to the Buyer’s conveyancer, as a result of issues relating to Coronavirus, by any financial institution (including Help to Buy) providing finance needed for the purposes of performing the contract; then the Completion Date provided for in this Agreement shall be deferred to a date fixed by agreement between the Seller and the Buyer (both acting reasonably in all circumstances), subject to clause 6 below. 3. If a new Completion Date cannot be mutually agreed, the Completion Date provided for in the this Agreement shall become the date thirty (30) working days after the date on which the Delay Event ceases to apply or in the case of the death of the seller the completion date will be extended to 10 working days following the grant of probate PROVIDED THAT if the parties, acting reasonably, do not agree that the Delay Event has ceased to apply, then the completion date shall be the date thirty (30) working days after the date on which the UK Government guidance are withdrawn or otherwise cease to apply.

davidmcn

Why restrict to "dies with coronavirus"? Potentially an argument about what ends up on the death certificate as the cause e.g. if he gets clear of the virus but dies shortly afterwards.