Are you selling a property on behalf of somebody else?
Perhaps an elderly parent needs to move into residential care, or maybe you’re dealing with the estate of a loved one who has passed away.
While the conveyancing process is usually very similar to any other property transaction, there are a few important differences to be aware of.
Selling a property using a Lasting Power of Attorney
If you have authority under a Lasting Power of Attorney (LPA), you may be able to sell somebody else’s property on their behalf.
For property transactions, you’ll need a Property and Financial Affairs LPA. An LPA for Health and Welfare does not give authority to deal with someone’s home, finances, or legal affairs.
LPA triggered by lack of capacity
For example, let’s say that your mother prepared an LPA many years ago naming you as her attorney. As she has become older, she has developed dementia and can no longer manage her own affairs. She now needs to move into a care home, and selling her property will help fund her care.
In these circumstances, you can act on her behalf and deal with the sale of the property.
From a conveyancing perspective, the transaction is largely the same as any other sale. However, attorneys have a legal duty to act in the donor’s best interests at all times. That means obtaining a fair market price and ensuring the sale proceeds are used solely for the donor’s benefit.
It’s also worth noting that some buyers may ask questions about the LPA during the transaction, particularly if they are unfamiliar with the process. This is perfectly normal and usually resolved by providing the relevant documents to the conveyancer acting for the buyer.
LPA triggered through choice
An LPA isn’t only used when someone loses mental capacity.
Many people choose to allow a trusted family member to deal with property matters on their behalf for practical reasons. For example, parents relocating abroad may prefer their son or daughter to handle the sale of their UK property rather than trying to sign documents and deal with estate agents from overseas.
In this situation, the attorney can accept offers, instruct solicitors, sign documents where appropriate, and manage the transaction on the owner’s behalf.
As with any LPA arrangement, the proceeds of the sale still belong to the property owner and must be paid to them.
What we need as conveyancers
The legal work involved in the sale is very similar to a standard conveyancing transaction.
However, before we can proceed, we’ll usually need:
- The original or a certified copy of the registered LPA
- Identification documents for all attorneys acting
- Confirmation that the attorney has authority to deal with the property
- Evidence that the LPA has been registered with the Office of the Public Guardian
Where there is more than one attorney, we’ll also need to check whether they must act jointly or whether they can act independently. This can affect how documents are signed and how quickly the transaction progresses.
Limitations on LPA sales
Although attorneys have significant powers, there are important restrictions.
In most cases, an attorney cannot sell the donor’s property to themselves, a close family member, or another connected person without approval from the Court of Protection.
This rule exists to protect vulnerable individuals and ensure that transactions are carried out at arm’s length and at a proper market value.
Even where everybody involved agrees that the price is fair, court approval will usually still be required before the sale can proceed.
What happens if there’s no LPA?
If the property owner has lost mental capacity but never created an LPA, family members cannot simply step in and deal with the sale.
Instead, an application must be made to the Court of Protection for the appointment of a Deputy.
The process can take several months, and in most cases the Deputy will also need specific authority from the Court of Protection before a property can be sold. This often results in a longer timeframe compared to a sale involving a registered LPA.
Probate situations
When somebody dies, their property forms part of their estate.
The executors named in the Will are responsible for administering the estate and, where necessary, selling the property. The proceeds are then distributed in accordance with the Will.
If there is no Will, the estate is dealt with under the rules of intestacy, which set out who inherits and in what order.
Do you need probate to sell the property?
In most cases, yes.
If the property was owned solely by the person who has died, the executors will need a Grant of Probate before the property can be transferred to a buyer.
Without the Grant, the executors do not yet have the legal authority to complete the sale.
There are some exceptions. For example, where the property was owned as joint tenants, ownership may automatically pass to the surviving owner outside of probate.
Can you market the house before getting probate?
Yes.
Executors do not need to wait for probate before putting the property on the market.
They can:
- Instruct estate agents
- Arrange viewings
- Accept an offer
- Instruct conveyancers
- Begin the legal work
This can save valuable time, particularly as probate applications can sometimes take several months.
However, contracts cannot usually be exchanged until the Grant of Probate has been issued, because the executors do not yet have authority to legally transfer ownership.
For this reason, it’s important that buyers understand from the outset that the transaction is dependent on probate being received.
What do conveyancers need in a probate sale?
We’ll usually require:
- A copy of the death certificate
- Details of the executors
- Identification documents for the executors
- The original Grant of Probate once issued
- A copy of the Will where relevant
If there are multiple executors, we’ll also need to establish who will be acting in the transaction and signing the legal documents.
How many valuations do you need?
When selling your own home, obtaining a single valuation may be sufficient.
In a probate sale, it’s generally sensible to obtain at least two, and often three, independent market appraisals from local estate agents.
This helps demonstrate that the property has been marketed and sold at an appropriate market value.
Executors have a duty to act in the best interests of the estate and its beneficiaries. If a property is sold significantly below market value, beneficiaries may have grounds to challenge the executor’s actions or seek compensation for any financial loss suffered by the estate.
Obtaining multiple valuations provides useful evidence that the executor has acted reasonably and fulfilled their responsibilities.
We’re here to make it easier
Whether you’re acting under a Lasting Power of Attorney or as an executor dealing with probate, selling a property can feel daunting, particularly when you’re already supporting a loved one or managing a bereavement.
The legal process itself is usually straightforward, but having the correct authority in place from the outset can prevent delays later on.
We’ve dealt with a number of probate and LPA transactions, so if you’re looking for conveyancers with experience, please do get in touch.