Sometimes a property is sold by someone acting on behalf of the owner. This could be an executor selling for a deceased estate, or an attorney acting for a living owner under a power of attorney. This article explains how to set up the agreement in each case and what to check as part of your AML process.
For how to run the checks in FLK it over, see AML/KYC in FLK it over.
Selling on behalf of a deceased estate (probate granted)
When probate has been granted, the executor is acting on behalf of the estate. The deceased person should still be referenced on the agreement.
Create your sales agreement as normal.
In the vendor details, enter the vendor name in this format: [Executor Name] as the Executor of the Estate of [Deceased Name]
Complete the AML check on the executor as you normally would.
Sight the probate documents as part of the process, in line with your usual supervision requirements.
Example: Jane Smith as the Executor of the Estate of John Smith
Selling on behalf of a deceased estate (probate not yet granted)
When probate has not been granted, we recommend that you:
Obtain a copy of the Will naming the proposed executor.
Confirm that an application for probate has been made, or will be made.
Please note that while you can list a property for sale and enter into a contract for sale before the grant of probate is issued, legal ownership of the property cannot be transferred to the buyer until there is official authority from the Court by way of a grant of probate.
In these circumstances, we recommend referring the matter to Legal or Compliance before proceeding, to obtain advice on who has the authority to enter into the agreement and how they should be named on the agreement.
AML checks should be conducted on the executor named on the agreement, however this must be confirmed by Legal or Compliance.
Selling on behalf of a living owner (power of attorney)
When the owner is still living, an executor has no authority to act. If someone is signing on the owner's behalf, they need to be appointed as the owner's attorney under a power of attorney.
Create your sales agreement as normal.
In the vendor details, enter the vendor name in this format: [Attorney Name] as Power of Attorney for [Owner Name]
Complete the AML check on both the owner and the attorney.
Sight the power of attorney document as part of the process, in line with your usual supervision requirements, and confirm that it:
Is validly executed
Has not been revoked or terminated
Authorises the attorney to deal with real property
Is registered, or capable of being registered, in line with the requirements of each state or territory
Authorises the attorney to enter into the proposed transaction
If you have any concerns about the documents produced or their validity, please obtain legal or compliance advice before proceeding.
Example: Jane Smith as Power of Attorney for John Smith
FAQs
Do I still need to include the deceased person's name?
Yes. The executor is acting on behalf of the estate, so the deceased person must still be referenced on the agreement.
Who do I complete the AML check on for a deceased estate?
The executor. Complete the check as you normally would.
What documents do I need to sight for a deceased estate?
The probate documents, in line with your usual supervision requirements.
What if probate hasn't been granted yet?
We recommend you seek legal advice, as circumstances may vary from case to case.
Can an executor sign on behalf of an owner who is still living?
No. An executor's authority only begins once the owner has passed away. If someone needs to sign for a living owner, they must be appointed under a power of attorney.
Who do I complete the AML check on for a power of attorney?
Both the owner and the attorney.
What type of power of attorney is needed?
The power of attorney must be validly executed and must authorise the attorney to act on the owner's behalf in relation to the proposed transaction. Where the transaction involves the sale of real property, the power of attorney should expressly permit dealings with real property. Additional requirements, including registration requirements, may apply depending on the state or territory in which the property is located.
If the property is located in NSW, for example, a power of attorney used to execute documents affecting land must generally be registered with NSW Land Registry Services. We recommend seeking legal advice if you have any concerns.
Does any of this vary by state?
Yes. Requirements relating to probate, letters of administration, powers of attorney, document execution and registration can vary between states and territories. In particular, states may have different requirements regarding the form of a power of attorney, whether it must be registered, and the documents required to establish an executor's authority. Where there is any uncertainty about a person's authority to act, the matter should be referred to Legal or Compliance before proceeding.