Once a buyer and a seller enter a property transaction, they formalise the process by signing an agreement to sell. A legal document post registration, this document sets the terms and conditions of the sale, based on which a sale deed is signed and executed. However, what would happen to a sale deal if a seller dies after signing the sale agreement? What choices does a buyer have? We find the answers in this legal guide.
What happens when a seller dies after the sale agreement is signed?
All the sale agreements carry a condition under which both the seller and the buyer state that they grant power to their legal heirs and nominees to perform the responsibilities under the sale agreement in case they are unable to do so. This means that in the unfortunate event of a seller’s death, their legal heirs are obliged to perform their duties. However, the process for this is highly complex, depending on various questions. These include:
What makes a seller’s legal heirs liable to complete the sale deal?
Under Section 17(1)(g) of the Registration Act, it is mandatory to register sale agreements valued at Rs 100 or above, providing them a legal standing. Based on the condition that the legal heirs of the seller are obliged to perform the responsibilities mentioned in the sale agreement, if they fail to fulfil their duties, a buyer can file a suit asking for specific performance of a contract.
What factors will influence the future sale?
In case the seller has left a Will
- A court will examine the validity of the Will, based on which the assets of the seller will be distributed among the people.
- The legal heir will become the owner of the assets.
- They will have to make this transfer on paper as well, using the death certificate, a copy of the Will and other necessary documents.
In case the seller dies without a Will
- This is known as dying intestate, whereby, the assets will be divided among the legal heirs based on laws applicable to his religious faith.
- Once the assets are divided, the legal heirs will have to get the documents transferred in their name.
- The legal heir who is the new owner of the property will complete the sale on behalf of the deceased.
Implications of sellers dying after the signing of the sale deed
The deal might get delayed
Even though the late seller’s legal heirs are obliged to perform the responsibilities of the deceased, it may take longer for the sale to complete since a great deal of paperwork must be done by the legal heir after obtaining ownership.
The legal heir may refuse to proceed with the deal
The legal heir might refuse to go ahead with the deal. In this case, the buyer can take them to court for specific performance of the contract. However, this means spending a great deal of time, energy and resources. Worse still, the court might rule in favour of the legal heir based on some technicality.
Dispute among legal heirs
This is the most unwanted scenario for a buyer. In case a dispute about the promotion ensues among the legal heirs, it might make the whole proposition burdensome for the buyer.
Housing.com Viewpoint
In the unfortunate event of the death of either party, a property deal might either hit a dead end or take extremely long to conclude. This is why most people prefer to keep the time window between the signing of the sale agreement and the sale deed short. In most cases, the time limit between the signing of the two documents is a month. This is particularly true if a seller is of an advanced age and does not keep well.
FAQs
Will a sale agreement automatically cancel if the seller dies?
No, a sale agreement will not automatically cancel if the seller dies.
What is included under the term legal heirs?
Legal heirs include successors, successors-in-interest, executors, administrators, legal representatives, attorneys and assigns.
Is the sale agreement valid after death?
Yes, sale agreements are valid even after the death of the parties involved because they have a condition that obliges the legal heirs of the parties involved to complete the deal in their absence.
What is a legal heir certificate?
A legal heir certificate is a document that has legal enforceability and states the relationship between the deceased and his legal heirs.
Who issues a legal heir certificate?
The legal heir will have to approach the municipal corporation office (in urban areas) or the tehsil office (in rural areas) to get the legal heir certificate.
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