Selling property with Lasting Power of Attorney

Clare Owen, an experienced conveyancer at ORJ, explains the trials and considerations of selling property as an attorney.

Selling property on behalf of a loved one as a designated attorney is perfectly possible – but it’s important you are aware of your responsibilities and the associated risks.

I recently completed a sale of a retirement leasehold apartment, acting for an attorney of her elderly aunt who had moved into a care home.

The sale was progressing smoothly through the conveyancing process and we were nearing the point of exchange when, sadly, the aunt passed away.

The transaction was consequently put on hold until probate had been granted.

Fortunately, the buyer was able to wait the six months it took to obtain the Grant of Probate.  I was able to keep in touch with the solicitor acting in the probate application and to regularly update the buyer’s solicitor.  

Through keeping up good communication with the buyer’s solicitor, the sale continued again once the probate had been issued, with my client now selling as an executor.

Selling a property as an executor is different to selling as an attorney. If you have been appointed an executor in someone’s will, you have responsibility for the property as soon as the person dies, whereas an attorney does not have the authority to sell a house if the owner dies.

As executor, a grant of probate is required before a property can be sold. If the property is part of an estate that’s worth more than £325,000, inheritance tax will need to be paid.

While the sale worked out for my client in the end, the situation served as a reminder that the transaction would have been more problematic if we had already exchanged contracts before the elderly lady had died. 

In those circumstances, my client would not have had any authority to sign the Transfer Deed until probate was granted and would have been in breach of contract through no fault of her own.  

When exchanging contracts on a sale and purchase – especially when dealing with clients approaching end of life – extra care needs to be taken. Sometimes a simultaneous exchange of contracts and completion will help reduce any risk of being unable to complete if the worst happens and the registered owner passes away.

Other considerations when selling a property as an attorney

• Check your legal authority – there are two types of Power of Attorney: one for health and welfare and one for finance and property matters. Ensure you are appointed as an attorney under a finance and property LPA in order to be authorised to sell the property on behalf of the owner.
• Ensure validity – make certain the LPA has been properly registered with the Office of the Public Guardian, otherwise it is not valid.
• Powers – LPAs are flexible and conditions and restrictions can be applied. Ensure you have the power to sell the property.
• Best interests – throughout the transaction always remember you are duty bound to act in the best interests of the person who appointed you. This includes weighing up all relevant factors, obtaining a fair sale price and handling proceeds of sale correctly.

It is important to always obtain professional advice when selling a property as an attorney. Buying and selling property is complicated enough when you do it yourself – and even more so when doing it on someone else’s behalf. Make sure you stay within the law by talking with the experts throughout the process.

Speak to me today by emailing team@orj.co.uk or calling 01785 223440.