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Can an Executor of an Estate Sign a Listing Agreement Upon the Death of the Owner?

Answer provided by Neil B. Garfinkel, REBNY Broker Counsel, Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP.

Answer:

Yes, if the condominium owner passed away and has a Last Will and Testament (a “Will”), the executor should be able to sign the listing agreement (this also assumes that the condominium was not left to a specific person or entity in the Will). The executor is the person(s) who is named in the Will to carry out the instructions set forth in the Will. The validity of the Will is confirmed by the Surrogate’s Court pursuant to a process called “probate.”  As part of the probate process, the Surrogate’s Court issues a document, called Letters Testamentary, which confirms the appointment of the executor and grants the executor the power to act on the estate’s behalf. This power generally includes the authority for the executor to enter into a real estate transaction on behalf of the estate. Accordingly, a real estate broker must have the executor provide a copy of the Letters Testamentary to prove that the executor has been granted the power to act on behalf of the estate (including the power to enter into the Listing Agreement).

In the event that an owner passes away and does not have a Will, the owner’s estate would be subject to the Laws of Intestacy. The Laws of Intestacy are a group of statutory laws which govern how the property of a person is distributed if the person dies without a Will. In such a case, the Surrogate’s Court, after receiving a Petition for Administration, would issue Letters of Administration, which authorize an administrator to act on behalf of the estate. The administrator would be the authorized party to sign a listing agreement.

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Important Tip: Generally, everyone with an ownership interest in a property must sign a listing agreement. If more than one person or entity owns a property, each such owner must sign a listing agreement. Towards this end, real estate brokers should include a representation in a listing agreement setting forth that the seller(s) are the sole owners of the property and have the full right, power, and authority to sell the property. In certain cases, a real estate broker may want further evidence confirming that all of the owners have signed the listing agreement (i.e. checking the most recent deed for a property).

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