Access to Property on Exchange of Contracts But Before Probate

[Jazz1966]

My friend is an executor of his uncle's will.
The estate consists of a small house worth around £400,000 - RICS valuation.
The estate is still going through probate.

A friend of his likes the house and has made a cash offer of £430,000.
She has made this offer as she has relatives in the area that she wants to live near them. My friend is very interested in this offer.

The buyer would like to exchange contracts asap and completion will be when probate is granted.

After an exchange of contracts (before probate has been granted), the buyer would like access to the property to start improvements/decoration. The buyer has stated that she is willing to state via her solicitor that she will pay for all improvements/decoration and - if she was to pull out - she would not ask any money from the seller for any improvements/decoration made. This agreement would be part of the exchange of contracts.

My query is, are there any pitfalls to the above scenario from the seller's point of view?

 

[kulture]

For £430,000? Invest in a solicitor. Ask a professional not a forum

 

[Jazz1966]

For £430,000? Invest in a solicitor. Ask a professional not a forum

Thank you for your reply. I am just asking the question on behalf of someone else but will pass your comments on.

 

[WaveJumper]

As above one for their solicitor I would also suggest to your friend they should get several valuations on the property (even though they have this RICS valuation) and not rush blindly into a sale as tempting as this cash offer appears the housing market is moving really fast, speak to local agents etc etc

 

[Elliot Green]

My friend is an executor of his uncle's will.
The estate consists of a small house worth around £400,000 - RICS valuation.
The estate is still going through probate.

A friend of his likes the house and has made a cash offer of £430,000.
She has made this offer as she has relatives in the area that she wants to live near them. My friend is very interested in this offer.

The buyer would like to exchange contracts asap and completion will be when probate is granted.

After an exchange of contracts (before probate has been granted), the buyer would like access to the property to start improvements/decoration. The buyer has stated that she is willing to state via her solicitor that she will pay for all improvements/decoration and - if she was to pull out - she would not ask any money from the seller for any improvements/decoration made. This agreement would be part of the exchange of contracts.

My query is, are there any pitfalls to the above scenario from the seller's point of view?

Things can potentially go wrong.

The way to consider this is what happens if she fails to pay for improvements and they are incomplete when she pulls out. How is your friend going to get the money to redress the imbalance from the solicitor letter? Is other security going to be provided?

Ask your friend what happens if improvements flip into dilapidations.

Disclaimer - this isn't legal advice. No liability accepted for any reliance upon the same. Ni reliance should be placed on this comment. Supplied for information purposes only. You should seek specific professional advice on the discrete facts of the case with reference to a full analysis of all of the relevant contractual considerations and clauses being fleshed out.

 

[kulture]

The reasons why you need a long talk with a solicitor are many

Normally exchange of contracts have a fixed completion date. Either side pulling out after exchange is very expensive. Any work done on the house would probably be the least of your problems .

Until probate can you prove that you have the right to sell the house?

Can you prove that you have achieved best value? Is it possible that one or more beneficiaries would sue you for not achieving the best value?

What if you exchange contracts but probate takes many many more months due to unforeseen problems?

All this and more will be explained to you by a solicitor.

 

[Michael Loveridge]

It's not unusual for this type of arrangement to take place, and it generally causes no problems. The sale will be in accordance with the Standard Conditions of Sale, and they specifically recognise this possibility at condition 5.2, which sets out the consequences of allowing the buyer into occupation prior to completion.

You will receive a deposit of £43k on exchange of contracts, which is a fairly hefty incentive for the buyer not to mess things up. And even if they did you could sue them for the balance - if they are a cash buyer then there should be no problem in getting paid, though it might be a good idea to insist that they lodge the full purchase price with the solicitors on exchange as security.

 

[Mister B]

After an exchange of contracts (before probate has been granted), the buyer would like access to the property to start improvements/decoration. The buyer has stated that she is willing to state via her solicitor that she will pay for all improvements/decoration and - if she was to pull out - she would not ask any money from the seller for any improvements/decoration made. This agreement would be part of the exchange of contracts.

And what happens if she inadvertently knocks down a load bearing wall, so bringing the main structure down? Big problems.

We had a similar scenario when we sold my Father's house. Advise from the solicitor was in no way should we agree. Allow access for planning purposes okay, but actual building work? no way.

 

[Jazz1966]

Thank you for yo

It's not unusual for this type of arrangement to take place, and it generally causes no problems. The sale will be in accordance with the Standard Conditions of Sale, and they specifically recognise this possibility at condition 5.2, which sets out the consequences of allowing the buyer into occupation prior to completion.

You will receive a deposit of £43k on exchange of contracts, which is a fairly hefty incentive for the buyer not to mess things up. And even if they did you could sue them for the balance - if they are a cash buyer then there should be no problem in getting paid, though it might be a good idea to insist that they lodge the full purchase price with the solicitors on exchange as security.

Thank you for your reply.
What would be the case if the buyer lodges the full amount with the seller's solicitor rather than the 10% deposit at the exchange of contracts. Under these circumstances, as the full amount has been lodged as security, can the buyer not just be allowed access to the house - even to make alterations. Under these circumstances, if the seller screws something up, the solicitor has the full purchase price. If the seller does lodge the full amount, can they actually start li=ving in the house? This is just a hypothetical situation I just thought of.

 

[ethical PR]

My friend is an executor of his uncle's will.
The estate consists of a small house worth around £400,000 - RICS valuation.
The estate is still going through probate.

A friend of his likes the house and has made a cash offer of £430,000.
She has made this offer as she has relatives in the area that she wants to live near them. My friend is very interested in this offer.

The buyer would like to exchange contracts asap and completion will be when probate is granted.

After an exchange of contracts (before probate has been granted), the buyer would like access to the property to start improvements/decoration. The buyer has stated that she is willing to state via her solicitor that she will pay for all improvements/decoration and - if she was to pull out - she would not ask any money from the seller for any improvements/decoration made. This agreement would be part of the exchange of contracts.

My query is, are there any pitfalls to the above scenario from the seller's point of view?

Then I would suggest their friend had more money then sense if she wants to do works on a property she doesn't own.

And 'your friend' should know better than to be rushed into a sale. He needs to get it valued first .

 

[Gyumri]

The buyer would like to exchange contracts asap and completion will be when probate is granted.

My query is, are there any pitfalls to the above scenario from the seller's point of view?

Yes. The seller would have no right to deal with the property by exchanging contracts prior to obtaining probate.

https://www.thegazette.co.uk/all-notices/content/101349