What Happens If A Buyer Or Seller Dies Before Real Estate Closing?

Buying or selling a property is often one of the largest financial decisions you'll make. It can be stressful even under normal circumstances, and even more so if a buyer or seller passes away before closing. Fortunately, Ontario law generally keeps the Agreement of Purchase and Sale ("APS") enforceable, binding the estate of the deceased to the transaction.

The APS and Binding Effect

Most residential transactions in Ontario use the OREA Form 100. Paragraph (28) states that the "heirs, executors, administrators, successors, and assigns" of the parties are bound by the agreement. This means that if either party dies, their estate must fulfill the obligations under the APS.

In addition to the contract itself, Ontario statutes support this outcome:

The Trustee Act – allows the personal representative (executor or administrator) of a deceased buyer to fulfill debts and contractual obligations, including completing an APS.

Further, the Estates Administration Act (EAA) & Land Titles Act (LTA) – provide that on death, title to the seller's property vests in their personal representative, who may hold, sell, transfer, or distribute the land to settle the estate.

As a result, if the APS was signed before death, the estate usually must proceed with the deal.

Key Considerations That May Affect Closing

1. Probate Delays

The personal representative must first obtain authority (a Certificate of Appointment of Estate Trustee) through probate, which can take 8–12 weeks or longer, depending on the court backlog and estate complexity. Closing dates may need to be extended until probate is complete, or the parties may mutually terminate the deal.

2. Conditions in the APS

If the APS was firm (all conditions waived or fulfilled), it is fully binding, and the estate must close. Breaches can lead to remedies such as damages or specific performance. If conditions remain unfulfilled (e.g., financing, home inspection), the estate may choose whether to fulfill or waive them within the original deadlines; death does not pause condition periods. If conditions expire unfulfilled, the APS becomes null and void, the deposit is returned, and neither party has further recourse.

3. Doctrine of Part Performance

Even if the APS is technically unenforceable, courts can compel completion under the common law doctrine of part performance if one party relied on the agreement to their detriment. This can apply to informal real estate agreements not using the OREA form.

Remedies if the APS Is Breached

If a party's estate fails to close, the other party may pursue:

1. Rescission – cancelling the APS and restoring both parties to their pre-contract position.
2. Damages – compensation for financial losses.
3. Specific Performance – a court order requiring the estate to complete the sale.

Even with a strong claim, recovery can be limited; you must mitigate your losses (e.g., by relisting the property), and if the estate is insolvent, your claim ranks behind secured creditors, meaning recovery may be partial or unavailable

Final Thoughts

The death of a buyer or seller does not usually void a real estate deal in Ontario. The APS and provincial legislation work together to ensure that estates are legally empowered and obligated to complete the transaction. However, probate delays, conditional offers, and disputes between beneficiaries can complicate the process, sometimes requiring extensions, mutual releases, or litigation.

It is crucial to seek legal advice to understand your rights and remedies if a party to your APS passes away so that you can explore the most effective strategies for recovery in the event of a breach of contract.

This article was co-authored by articling student Mariem Naem.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.