Land Sale without Probate - Overreaching trust

I have had a few inquiries recently from conveyancing colleagues that has cause me to question the position.

When a property is owned as tenants in common and one of the owners dies, it has always been the case that you seek and receive a probate from the seller and the executor/administrator is a party to the sales contract and transfer deed.

However, the land registry no longer require a probate in this case and are happy to go with a death certificate together with ST5 and RX for to remove the restriction.

What my conveyancing colleagues are finding in that because of the Land Registry’s new position, the sellers solicitors are refusing to provide a probate to prove authority their clients have authority to sell. Instead they are arranging for the surviving owner to appoint a trustee so that receipt of sale proceeds deals with overreaching and any other land law issues.

I’m struggling to understand that this is OK from a probate point of view as in my mind that doesn’t give the buyer certainty that they property is being sold and sale proceeds distributed in accordance with probate rules.

Am I over thinking this or should we still be seeking a probate? If anyone has any legislation or case law to confirm the position that would be really helpful too.

It is not for the buyer’s solicitor to require probate, this is a matter for the trustees of the land. All you need to ensure is that a second trustee is appointed as proposed by the land registry to overreach any beneficial interests.

Simon Northcott

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But will a buyer who takes land from two trustees (in the knowledge that one of the registered proprietors has died, but probate of his estate has not been taken out) be a buyer in good faith for the purposes of overreaching?

Julian Cohen

Simons Rodkin

The trust of land is entirely separate from the estate of the deceased proprietor.
Assuming that X and Y held the property as beneficial tenants in common in equal shares and X has since died, Y could transfer the property into the names of Y and Z (still subject to the then existing beneficial ownership). Y and Z will be the two “trustees” of a trust of land under which they hold the property as to 50% for Y and 50% for the estate of X. Indeed there may even be some other trust arrangement of which the seller is not aware and about which seller need to concern himself. Provided the seller has purchased from two “trustees” (or a trust corporation), the seller can overreach.

Paul Davidoff
New Quadrant Partners Ltd

I have never understood why the land registry was said to insist upon the PRs of the deceased co-owner being party to the transfer of title.

The “new” position is in accord with the law as set out in the 1925 legislation, so it is somewhat surprising that it has taken the Land Registry so long to recognise this. I can only imagine that it sought to be a guardian of the estate of the deceased co-owner in wanting to make sure their PRs had knowledge of the sale and the price at which it was being made.

Probate will be required to be presented to the surviving co-owner(s) to evidence the PRs right to receive the deceased’s share of the proceeds of the sale. Without sight of the grant, they leave themselves open to a claim that they have paid out to the wrong people. In which case they may be required to account to whoever had a valid legal claim to the deceased’s share of the proceeds whether or not they are able to recover any of the funds from those to whom they wrongly paid them.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Hello All

Thank you for your replies. So from what all of you have said the purchasers don’t have to worry about a grant of probate as long as there are two trustees who satisfy the overreaching rule. They can release funds to the sellers solicitor and any issue with the estate is a matter for the sellers solicitor to deal with.

Hi Sangeeta,

The Probate of the 1st co-owner has never been required. The estate’s interest is only in the beneficial interest, not the legal title. That is solely owned by the surviving 2nd co-owner.

All the buyer should ensure is that the beneficial interest is overreached and they get a receipt from 2 Trustees. The Trustees giving that receipt then have the responsibility to distribute the sale proceeds correctly. The property is freed from any connection to that as far as the buyer is concerned. That is what overreaching is designed to do.

Ed Worrall TEP
Finn Gledhill