There are a few things you need to consider before purchasing a home that is subject to Probate. Firstly, what is Probate? Probate is required to sell a property when a deceased has passed away. It is needed to be applied for with the Supreme Court to ensure the will is valid and to authorise the executor to carry out any necessary tasks to distribute the estate in accordance with the Will. A will cannot be administered until a grant of Probate has been obtained.
Applying for a Grant of Probate can be a lengthy process and can generally take between 3 to 6 months to obtain before fully granted. When purchasing property and the contract has a special condition or clause inside stating ‘subject to Probate’, this means that your property purchase cannot settle until this Probate has been granted by the Supreme Court. Currently, there have been lengthy delays with the Supreme Court granting probate. It is important to know that before purchasing a home that is subject to Probate, that you will not actually have a set settlement date. Settlement could take up to 6 months and sometimes more to settle as you will need to wait until the clause has been satisfied. If you are not wanting to wait any longer, you will need to wait until the expiry period until having the right to pull out. Every contract is different so not every subject to probate contract will have the same expiration period. However, once it has come to its expiration (i.e. 3 to 6 months from exchange) you will have the right to rescind and have your deposit refunded to you. A property cannot be sold unless the title has been transferred from the deceased to the joint tenant, executor, or personal representative. Once this is done, the property can then be transferred to the purchaser/s.
It is important to also consider the stamp duty, if you’re not exempt, is due and payable after 3 months from the date of the contract, whether settlement has occurred or not. The other concern before committing to a subject to Probate contract is that your finance may expire while waiting for the Probate to be granted, it is important to speak to your broker regarding this prior to exchanging, being that if Probate has been granted and your finance has expired, you may then not be able to obtain finance and be able to settle, meaning you will then be in default of the contract and could be sued for your deposit and the contract terminated.
If you are considering on purchasing a home subject to probate, please give us a call to discuss in more detail.