Title Holder passes away before Settlement. How to negotiate a licence to occupy?

[buckerooni]

Hi All,

We purchased a property a month back, settling on the 26th Nov but unfortunately one of the Title holders (tenants in common) passed away last week. Terrible news for them, complications for us.

We had planned to have friends (a young family) move in for 6 months while their house gets rennovated.

We have asked for a Licence agreement to allow the tenancy to happen on the 28-29th of November but have not recieved an answer. I've explained this situation to the conveyencer and to push hard. The conveyencer explained that it's really in the hands of the vendor to sort something out. Given the messy situation of not knowing (to our knowledge) who the title rights will be granted to it seems we are at the mercy of this process, with no ability to apply any pressure to get this resolved. Even with the unfortunate circumstances it leaves us in a bad position and possibly losing an excellent tenant.

I know we can execise some kind of right to the effect of 'get it sorted in 14 days or we pull out' but we still want to proceed with the purchase as it's fantastic and will become our PPOR after a 1.5 years or so. We'd also like to get our friends in to rent it off us, as it's financially advantageous and low risk.

Is it worth getting a property solicitor to assist instead of a conveyencer?

Any advice on how to move forward with securing a licence to allow tenancy of the propery while the title is sorted out?

Thanks for any advice.

PS. help!

 

[marg4000]

You need a solicitor as this is potentially a legal mess.
Marg

 

[Propertunity]

In NSW (yes, I know you're in Vic), if you or the vendor goes nuts or dies, then the whole deal is off. Your deposit is refunded out of trust and off you go on your own separate ways.

You need a solicitor as Marg says.

 

[Terryw]

Have a read of your contract of sale. Often the contract terminates on death.

 

[buckerooni]

Thanks for the reply, just to clarify the title is currently a Tenants in Common and only 1 of the title holders has passed away.

So the question is: 'who gets that half of the title?' Apparently they look to the Will first and if it's unclear then the messiness begins.

It was explained to me that there is no issue about the contract becoming void, but that the 'probate' process could be lengthy as the vendor and related parties have to establish who has a right to the other half of the title.

My question was around there being any benefit from getting a property solicitor to help expediate the process or if they can provide some value above what a conveyencer can.

Thanks for your thoughts.

 

[the helix]

Thanks for the reply, just to clarify the title is currently a Tenants in Common and only 1 of the title holders has passed away.

So the question is: 'who gets that half of the title?' Apparently they look to the Will first and if it's unclear then the messiness begins.

Correct.. it will all come down to what is said in the Will. You might be lucky, and the deceased may have left their share to the other Tenant in Common.. but go easy on them. They have just lost a loved one.

 

[Terryw]

What state is the property in?

Assuming there were no special conditions in the contract and it is still afoot then I would think the executor of the estate would take over or step in the shoes of the deceased. Tenants in common can deal with their share in their wills, so this may complicate things - especially if there is no will or they leave their share to someone other than the other TIC person. The title would need to be changed into the executor/trustee of the estate. But this may not happen quickly even if there is a valid will. This may cause a delay in settlement - very likely it will.

Also see http://www.austlii.edu.au/au/legis/nsw/consol_act/rpa1900178/s93.html

 

[buckerooni]

Hi Terry, I'm in Victoria. Yes, it looks highly unlikely that we will settle on the correct date.

They're rejected our offer for a licence to occupy, something about them being unsure of how long it will take them to sort out correct settlement (not a good sign really). We are serious about purchasing this property, but I suspect the vendor and related parties may be a little unsure about our intentions post (original) settlement date.

I've asked them if they need any assurance about us proceeding with the purchase that we could provide something to them in writing along the lines of 'we will pursue the purchase of this property for 4 months after the original settlement and at that time reserve the right to withdraw from the sale'.

Turns out my future tenants can wait to mid december before making a decision about moving in (building does not start until Jan 2011) so I've got a bit more time up out sleeve.

I certainly don't envy their position but if we can negotiate a licence deal then both parties will benefit (rental income for them, tenancy for my friends family).

 

[buckerooni]

well, suprising news. this is now setting tomorrow! From a situation that seemed to be filled with uncertaintly it's come together amazingly fast and only 2 business days after the original date.

Thanks for all the feedback everyone, much appreciated!

 

[pennyk]

fantastic news... and a very pleasant surprise.
Pen