Death presents unique issues for contracted purchases of property
The question: Are beneficiaries on the hook if someone who has purchased pre-build condos passes away?
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Q: My younger brother recently passed away and it was discovered that he had purchased a couple of pre-build condominiums as investments. Neither of them are yet built but my parents, who are my brother’s beneficiaries and on a fixed income, cannot afford the eventual mortgage costs and are not interested in purchasing the property. Are they as heirs responsible for closing these two properties?
A: A person’s passing presents unique problems for contracted purchases of property. The first item to cross off is to make sure that there is no provision in the agreement of purchase and sale that the contract will be binding upon the “heirs and beneficiaries” of the purchaser if he/she were to pass away. This is crucial because the purchaser’s beneficiaries can then request that the builders cancel the contract based upon the doctrine of frustration.
This legal concept basically allows a party to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party’s principal purpose for entering into the contract. Obviously, death of one of the contracting parties would fall within this definition.
You should contact your late brother’s lawyer to request that the builders set aside the agreements.