What if co-owner dies between exchange and completion

[ShakingAfterAllThis]

Selling property.
Co-owner is old.
Buyers want a long time between exchange and completion.

What if co-owner were to die after exchange but before completion?

Would it
a) all be fine and continue
or
b) be held up until probate (and thus we would be in breach of contract for not completing on time)
or
c) something else?

Depends how you hold the property.
Joint tenants, only need death certificate to be given to solicitor.
Tenants in common, need to apply for probate.

Own in designated percentages whichever that is? And we could will our part to someone else on death.

@ShakingAfterAllThis sounds like tenants in common.
It would mean if one of you died, you would have to go through probate.

However, completion would still take place. What would likely happen is the solicitors would hold on to any sale proceeds until Grant of Probate.

This happened to us! Elderly couple. Wife fell unexpectedly ill and died quickly. It held things up by about 2-3 weeks but ultimately proceeded fine. Didn’t have to wait for probate

Without the grant of probate you can't get registered at the Land Registry so if you are buying with a mortgage your solicitor can't use the mortgage money without approval which is unlikely to be given.

Without a mortgage you can take a view but would be advised to not hand over the money

Sellers would in theory be in breach of contract.

Easiest thing to do would be to then have a supplemental agreement to vary the completion date to be 10 working days after receipt of the grant of probate.

If you have a mortgage need to factor in the mortgage offer expiry date to the completion mechanics.

So sale could happen, I could get my % and solicitors hold onto % of deceased co owner until probate?

@roobyro and @Blankscreen You seem to disagree?

Roobyro you say completion can still take place
Blankscreen you say seller would in theory be in breach of contract.

They can't both be true?

@prh47bridge I don't know if this is within your expertise? I see you a lot on the education boards under another name.

I'm a commercial property lawyer.

So whilst completion (transfer of the money) could happen the buyer can't get registered. You cant' retain priority at the Land Registry forever so it is risky for the buyer to complete even if the money is held.

Depends on whether the buyer has a mortgage in which case their lawyer shouldn't use the money and if no mortgage whether the buyer is prepared to accept the risk.

So the risk is to the buyer not the seller?
And so if anyone would be in breach of contract it would be the buyer?
(it is commercial)

Would we as seller get to keep deposit?

You don’t have to accept a long time between exchange and completion - anything longer than a fortnight got our solicitors very twitchy. Unless there’s a very good reason, what will happen if you go back to the buyers and say, sorry, we want a shorter gap?

Well exactly.
We were expecting 28 days max, they want considerably longer.
We would never have accepted the offer if we had known but naively didn't clarify as they seemed keen to proceed with urgency.
Trying to decide whether to pull out (which my give us some costs but not extreme) or negotiate a middle way. Age of co-owner adds risk to long delay between the two parts of sale.

As you own in designated percentages, I am assuming you are tenants in common as that is the only way such an arrangement can work.

If there are three or more co-owners and one dies, the remaining co-owners can complete the sale and pay the deceased's share to their estate.

If there are only two co-owners, the surviving co-owner must appoint a trustee (normally the executor) to complete the sale. The deceased's share would, of course, be paid to their estate.

It is a complex situation, and you would need proper legal advice if it happens. It may delay completion.

@prh47bridge Thank you so much. With 3 or more co owners does it matter who owns what percentage? (We are 50, 25, 25 %)

Thank you to everyone who has contributed so far.

All this is making me think we should not go along with this and should walk away from sale if buyers won't set a standard completion date of 28 days (or less).

No, the percentages make no difference. But I agree with others that, if it were me, I wouldn't accept a long delay from exchange to completion.

Thank you.