Death of a Spouse Before Completing Real Estate Sale

A contract is enforceable against all parties who signed the agreement. When one party breaches the contract, the other party usually seeks money damages in a sum equal to the loss suffered from the breach. Sometimes courts will order the party who breached the agreement to specifically perform the contract, upon the determination that money damages alone would not be sufficient to make the other party whole. 

Both Spouses Signed the Home Sale Contract

Real estate is one situation where courts can grant specific performance following breach of the contract. A presumption exists that real property is unique and monetary damages would not be an adequate substitute for specific enforcement of the agreement. If both the spouse and deceased had signed the contract, it would still be enforceable against the lone survivor. In most cases, the house would pass to the survivor without going through probate since real estate is normally owned by married couples as a joint tenancy with a right of survivorship. When one spouse dies, by law, the other would instantly get the home. Since the survivor would own the home, this spouse would have the power to convey or sell it. If that person also signed the home sale contract, he or she would be contractually bound to go through with the sale. It would probably be reasonable and appropriate to allow the survivor extra time to put affairs in order, but the contract is still enforceable.

One Spouse Signed or Owned Property

If only one spouse signed the contract, it is not clear if it could be enforced against the survivor. Contracts are only enforceable against those who are parties or signatories to them. If the survivor was not a party to the contract, it will not bind the spouse. Furthermore, if the real estate was owned by the deceased spouse individually, rather than by the two spouses jointly, the survivor is not automatically entitled to the property by law. Instead, the spouse would need to wait until the home is distributed by will. If there was no will, the surviving spouse or partner would need to go through intestate succession. In either case, the survivor would not actually own the home right after the death, and literally could not sell it immediately.