Humber/Ontario Real Estate Course 3 Exam Practice

What is the status of an agreement of purchase and sale if the buyer dies before closing?

1. An heir inheriting the buyer's estate would not be bound by the agreement.

2. The executor of the buyer's estate would be bound by the agreement's terms.

3. The agreement becomes null and void if either party dies before closing.

4. The agreement does not consider the death of the buyer before closing.

5. The seller has the option to void the agreement upon the buyer’s death.

6. The agreement remains valid only if the seller agrees to proceed.

The correct answer is: The executor of the buyer's estate would be bound by the agreement's terms.

The correct answer highlights that the executor of the buyer's estate would be bound by the agreement's terms after the buyer's death. In the context of real estate transactions, an agreement of purchase and sale is considered a legally binding contract. When the buyer passes away before the closing date, their estate does not simply dissolve the contract; instead, the responsibility to fulfill the agreement generally transfers to the executor or personal representative of the estate. This individual has the authority to manage the decedent's financial obligations and assets, including real estate transactions. The executor must act in the best interests of the estate and can choose to proceed with the sale as stipulated in the agreement, ensuring that both parties' rights and legal standings are maintained. The other potential options do not accurately reflect the legal principles involved. For instance, an heir may inherit the buyer's estate, but they are not automatically bound by the agreement unless the estate's executor decides to uphold it. If the agreement were to become null and void upon either party’s death, it would undermine the principle of contractual obligations being upheld by estates. The agreement does consider the death of the buyer, as it necessitates action from the executor. Furthermore, the seller does not automatically gain an option to void the agreement simply