Buying a Deceased Estate in NSW? Here's What Every Purchaser Should Know
When buying a deceased Estate, it generally isn't the same as buying from a typical Vendor. There are additional legal considerations that can affect the sale process, settlement timeframes, and even whether the Vendor has the authority to sell the property.
Here's what every Purchaser should know before making an offer.
What is a Deceased Estate?
A deceased Estate is any property owned by a person who has passed away.
Before the property can be transferred to a purchaser, the person selling it must have the legal authority to deal with the Estate. That authority usually comes in one of two forms:
- Grant of Probate; or
- Letters of Administration.
Understanding the difference is important because it can impact when the property can be sold and how long settlement may take.
Probate vs Letters of Administration – What's the Difference?
Grant of Probate
Probate is issued by the Supreme Court where the deceased left a valid Will naming an Executor.
The Grant of Probate confirms that:
- the Will is legally valid; and
- the Executor has authority to administer the Estate, including selling any real property.
Once Probate has been granted, the Executor can generally proceed with the sale and transfer of the property.
Letters of Administration
Letters of Administration are required when:
- the deceased did not leave a valid Will (they died interstate); or
- there is a Will, but no Executor is able or willing to act.
Instead of an Executor, the Court appoints an administrator to manage the Estate.
The administrator has similar powers to an Executor, but they cannot act until the Court grants the Letters of Administration.
How Can This Affect a Purchaser?
While many deceased Estate transactions proceed smoothly, Purchasers should be aware of a few additional considerations.
1) The Sale May Take Longer
If Probate or Letters of Administration have not yet been granted, settlement may be delayed.
In some cases, the property is listed for sale before the Grant has been issued, with the Contract including special conditions allowing additional time for the seller to obtain the necessary authority.
If you're working with strict finance approval deadlines or need to move by a certain date, these delays can become significant.
2) Settlement Dates May Be Flexible
Unlike a standard property transaction, deceased Estate Contracts often include extended settlement periods or provisions allowing settlement to occur a certain number of days after Probate or Letters of Administration have been granted.
It's important to understand these clauses before exchanging Contracts so there are no surprises later.
3) The Property is Usually Sold "As Is"
Executors and administrators often have limited knowledge of the property's history.
Because they may never have lived in the home, they are generally unable to answer detailed questions about:
- previous renovations;
- repairs;
- plumbing or electrical issues;
- termite history; or
- building defects.
For this reason, deceased Estate properties are commonly sold on an "as is" basis.
Purchasers should always obtain building and pest inspections before becoming legally committed.
4) There May Be Limited Warranties
An Executor or administrator generally cannot make the same representations as an owner occupier.
This means Purchasers should carry out their own due diligence, including reviewing:
- title searches;
- planning certificates;
- drainage diagrams;
- strata records (if applicable); and
- any other searches relevant to the property.
Can You Exchange Contracts Before Probate?
Yes.
A property may be marketed and Contracts exchanged before Probate or Letters of Administration have been granted.
However, this usually depends on how the Contract has been drafted.
It is common for the Contract to include a special condition making completion conditional upon the seller obtaining the necessary Grant from the Supreme Court.
Purchasers should carefully review these provisions, as they can affect settlement timing and each party's rights if delays occur.
Should You Be Concerned About Buying a Deceased Estate?
Not necessarily but we do recommend carrying out your due diligence before entering contracts.
Thousands of deceased Estate properties are bought and sold across NSW every year without issue. The key is understanding that these transactions can involve additional legal steps compared with a standard sale.
Having a property solicitor review the Contract before exchange can help identify:
- whether Probate or Letters of Administration have been obtained;
- whether the seller has authority to sell;
- any special conditions affecting settlement;
- unusual risks or delays; and
- any amendments that should be negotiated before you sign.
The Bottom Line
Buying a deceased Estate doesn't have to be complicated, but it does require careful attention to the legal process.
Whether the Estate is being administered under a Grant of Probate or Letters of Administration, understanding the seller's authority and reviewing the Contract carefully can help avoid unexpected delays and give you confidence before you commit.
At Lawgix, we regularly assist Purchasers with reviewing Contracts for Sale, explaining special conditions, and guiding clients through every stage of the conveyancing process.
Thinking about purchasing a deceased Estate? Contact the team at Lawgix before you sign the Contract. We'll help ensure you know exactly what you're buying and what to expect throughout the transaction.
