Purchase and Sale Agreement Survives Death
On July 22, 2022, Judge Maureen Mulligan of the Middlesex Superior Court decided that a purchase and sale agreement was enforceable against the estate of a condominium owner who died after agreeing to sell the property before the closing could be consummated.
William Rowe, the owner of a condominium, initially agreed to sell his condo to Plaintiff Liberty Hill LLC (“Liberty Hill”) for $216,000. However, Mr. Rowe sought additional offers before he signed the purchase and sale agreement. Liberty Hill sued Mr. Rowe resulting in a settlement whereby Liberty Hill agreed to pay $260,000 for the condo and Mr. Rowe signed a purchase and sale agreement reflecting this.
However, before the closing could take place, Mr. Rowe died intestate (without a will). Mr. Rowe’s nephew and estate representative then listed the property with a broker. When Liberty Hill moved to enforce the settlement agreement, Mr. Fernald argued that he was obligated to seek better offers than what had been agreed to citing Mass. Gen. Laws ch. 202, § 19 which requires a personal representative to petition the Probate & Family Court for a license to sell real property belonging to the estate and Mass. Gen. Laws ch. 202, § 38 which states that a the personal representative, upon receiving such license, has a fiduciary duty to obtain the highest possible price.
Judge Mulligan disagreed finding that Mass. Gen. Laws ch. 204, § 1, which provided specific performance of a real estate contract when the owner dies prior to conveyance, controlled in the case. “Sections 19 and 38…provide for the sale of real estate…primarily in cases where the heirs cannot agree on what to do with the property. Here, [Mr.] Rowe signed the purchase and sale agreement with [Liberty Hill] prior to his passing…Were [Mr.] Rowe alive, the agreement could be enforced against him by [Liberty Hill]; that same right of enforcement now extends as against [Mr. Fernald] as personal representative of Rowe’s estate.”
This ruling is significant because it confirms that Mass. Gen. Laws ch. 204, §1 requires a probate estate to perform a pre-death purchase and sale agreement in accordance with its terms and conditions. In short, if you sign a purchase and sale agreement in Massachusetts, your probate estate is bound to it.
Liberty Hill, LLC v. Fernald (Mulligan, J.) (Civil Action No. 2281CV00480).