The following questions represent those members ask of the Legal Hotline about transactions where the death or absence of buyers, sellers, tenants, or a broker occurs.

Landlord/tenant 

Does the death of a tenant terminate the lease of the property? Must the estate of the tenant fulfill the terms of the lease?

The general rule is that the provisions of a lease are enforceable by or against the successors in interest of any party to the lease. Wis. Stats. §§ 704.09(3) and 704.29 provide a statutory framework for landlord/tenant relations regarding successors in interest and landlord mitigation of damages. If a tenant passes away during the term of the lease and this results in the failure of the estate to pay rent or any other breach of the lease occurs (unless the landlord has expressly agreed to accept a surrender of the premises and end the tenant’s and the estate’s liability), the landlord can recover rent and damages except for amounts which the landlord could mitigate by law. The landlord may work with a personal representative to reach a negotiated resolution regarding contractual obligations and removal of the decedent’s personal property. The parties may work with private legal counsel if negotiation does not result in an acceptable solution for each of the parties.

Jail 

The listing broker has a listing with a seller who is in jail. The broker has received an offer on the property but has not been able to get in to see the seller to have him sign it. The seller does not have a power of attorney (POA). The buyers think the broker is avoiding presentation of the offer. How to proceed?

The broker may continue to attempt to initiate contact with the seller through the public defender’s office or the sheriff’s department regarding access to prisoners, either by visitation or mail, to determine if the seller may receive and send correspondence. Depending on the length of time the seller will be in jail, the seller may consider executing a POA for the sale of the property. Although the fact that the seller is in jail is arguably confidential information, the broker may work with the buyers to assure them that all possible means are being employed to present the offer to the seller.

Death of a buyer 

The buyers/clients are husband and wife and are buying a retirement home. They have an accepted offer, however, the broker received notice that the husband passed away last night. What should the brokers do?

The parties may be referred to lines 272-274 of the WB-11 Residential Offer To Purchase, which provide that the agreement binds and inures to the benefit of the parties to the offer and their successors in interest. Presuming the widow wants to proceed with the transaction, she will work with legal counsel to facilitate the completion of the transaction. During this time, the brokers should maintain communication with the buyer and seller about the transaction and proceed in accordance with the direction of the parties.

A single buyer has an accepted offer to purchase on a property, but passed away before the closing. Can the seller cancel the offer and find another buyer?

The death of the buyer does not act to terminate the offer to purchase. It may, however, take time for a personal representative or executor to be appointed to administer the buyer’s estate. Once appointed, the buyer’s personal representative or the executor of the estate may either complete the transaction or negotiate to terminate the contract. Until that time, the broker may wish to discuss the situation with the listing agent and the seller to determine if the seller will release the estate or work out a settlement short of having the estate buy the property.

Death of a seller/offer to purchase 

The seller is terminally ill and could die at any time. The seller has an accepted offer on a parcel of vacant land that is to close some time this month. The seller has signed the deed in anticipation of the closing, but has not yet signed any closing statements. Although the seller is married, the seller is the sole owner. What happens if the seller dies before the closing?

If a deed is signed but not delivered, the death of the seller invalidates the deed. However, the offer does not become void because of the death of the seller. The widow may be referred to legal counsel to expedite appointment of a personal representative to administer the estate. Wis. Stat.§ 860.09 provides that the buyer may petition the court for specific performance if the personal representative refuses or fails to perform on the contract.

Death of a seller/listing 

The seller/client has listed a property as sole owner. He wants to sell it before he dies so that his wife will have the funds, but this seems unlikely. The broker realizes that the listing contract will end upon the seller’s death. Is there any way to expedite re-listing with the widow?

Even though the wife is not an owner, she may join in the listing contract. The authority to enter into the listing is not, however, authority to sell the property. After the death of the owner, it may take time for the wife to obtain authority to transfer the property either as the personal representative of the seller’s estate, or as the owner of the property, depending on the terms and conditions of the seller’s estate plan and will. If the transaction does not close prior to the owner’s death, the wife may work with legal counsel regarding the administration of the estate.

The listing broker has a listing with a seller who passes away before the accepted offer goes to closing. What happens to the listing and commission?

When a seller passes during the term of a listing the authority to market and sell the property per the listing contract terminates. If, prior to the seller’s passing, there is an accepted offer, which earns the broker a commission per the commission provisions of the offer, a claim for the commission may be made with the seller’s estate.

Power of attorney/authority 

A broker has a listing on a property. The owner has been in a nursing home and the broker is working with the owner’s POA. The owner just passed away over the weekend, and there is an accepted offer on the property. Does the fact that the owner passed away change the status of the POA or the accepted offer in any way?

The authority of the POA will terminate upon the death of the seller. However, the offer to purchase will still be enforceable between the buyer and the estate of the seller. An estate will be opened and a personal representative appointed to complete the sale.

Can a broker provide POA documents to parties?

Wis. Stat. § 243.10 sets forth language for a basic POA form for finances and property (www.legis.state.wi.us/statutes/Stat0243.pdf). The WRA does not produce POA or living will forms, but parties may obtain forms from an office supply store, legal counsel or the Wisconsin Department of Health and Family Service’s website at dhfs.wisconsin.gov/forms/AdvDirectives/index.htm#Print. For more information about POA authority see Legal Update 04.05, “Avoiding Liability When Signing and Making Referrals,” online at www.wra.org/LU0405.

Broker/sole proprietor 

A broker who has a one-person office and no LLC or corporation dies. What is the status of his/her listings?

By operation of law, the listings expire upon the broker’s death. The listing is a personal service contract, and the death of the broker will terminate the listings. Any buyers and sellers may use the services of their attorneys to complete the pending transactions.

Broker/licensed real estate business entity 

What happens when a broker who has a real estate business entity passes away?

Wisconsin law allows a broker to obtain a real estate business entity license, provided there is one business representative licensed as a broker. A business entity, structured as a corporation or LLC, generally will survive the death of a member or shareholder. A licensed entity may continue to service the listings and transactions after the death of the broker, provided there is another licensed broker to fulfill the business representative role. The continuation of the entity is one key distinction between a broker structuring his or her real estate business as a sole proprietorship or as an entity.