As a real estate agent company that specializes in helping adult-children, we’re often asked questions like, “Can a person with dementia sell their house?”
It’s an interesting question. One that steps into the area of the law. In this post, we’re going to cover some of the areas that attorneys look at and how it affects real estate and the ability to sell a home as a person with dementia.
As you read this article, understand that we are NOT attorneys. The article is merely for informational purposes and should not be taken as legal advice. If you need legal counsel, please find suitable representation.
It’s All About Contracts
To sell a home, a homeowner needs to sign two separate contracts. One between the home seller (often the owner) and listing real estate agent, and another between the home seller and buyer.
Every state has their own definition of contract enforceability. In other words, whether a contract is valid and enforceable.
In Michigan, for example, a contract must meet all five criteria in order to be a valid, legally enforceable, contract.
- Competency: Must have the ability to consent. Often the area of focus for a parent with dementia.
- Proper Subject Matter: no illegal terms. Generally, not an issue if you’re using a realtor’s board approved purchase agreement and listing agreement.
- Consideration: The promises each party is making to each other. Example, a buyer agrees to give money to a home seller, and the seller agrees to sell the home.
- Mutuality of Agreement: An offer and acceptance. Both parties agree to the terms. Example: both buyer and seller sign the purchase agreement.
- Mutuality of Obligation: both parties are bound to the terms of the contract.
If you’re interested in a more in-depth explanation of contract laws in Michigan, Grewal Law has an excellent and straightforward article on their site.
When it comes to whether a person with dementia can sell their house boils down to establishing competency and capacity of the person with dementia.
Are They Competent?
In contract law, according to Grewal Law, a person’s ability to satisfy competency is contingent on the following requirements.
- A legal adult (over 18)
- Of sound mind and sufficient mental capacity
- Free from restraints (in this context, restrictions that affect their ability to freely consent)
Well, age is a checkmark. Two issues tend to come up with a dementia homeowner.
Are they of sound mind and sufficient mental capacity? Did they agree to the contract free of coercion, force, or tricks?
The answer to these two critical questions will determine if a person with dementia can sell their house. Unfortunately, it’s tough to answer these questions. It’s a large gray area.
What’s The Dementia Diagnosis?
Dementia is a term used to describe a group of symptoms affecting memory and mental capacity. For example, the ability to understand legal contracts. Dementia is a series of symptoms that are caused by various diseases.
So, a patient with late-stage Alzheimer’s isn’t likely to meet the criteria for competency, and therefore, the requirements to sign legal documents. In this case, a person with dementia can’t sell their house.
Instead, a third-party, like a power of attorney (POA), needs to be established.
On the other hand, a patient recently diagnosed with minor symptoms of dementia may well be able to sign their own legal documents, and therefore, sell their home.
The reality is that each situation is analyzed on a case-by-case basis.
So, in trying to answer the question of whether a person with dementia can sell their house, the answer is it depends.
Maybe.
Establishing mental capacity is the responsibility of attorneys and courts.
Tricked, Forced, or Coerced?
Even if mental capacity is sufficient to enter a legal agreement, the person with dementia must have entered into the agreement through their own freewill.
They can’t be tricked, forced, or coerced.
Unfortunately, due to the symptoms of dementia, it’s possible for a homeowner to be tricked or influenced by someone else.
Here’s a hypothetical example to help explain: an elderly man, living alone, has dementia. He appears perfectly competent and knowledgeable. He can remember the names of his children, his address, and the day of the week. For the most part, you wouldn’t guess he has dementia.
Now, this man’s son lives in the same city and the son’s wife is his primary caregiver. It’s the son’s wife who does all the shopping, helps him with his medication, and checks in on the elderly man every day.
When the son is over, he talks endlessly to his father about how the elderly man’s daughter doesn’t help. He pressures his dad to sell his home and move into an assisted living center. Eventually, the father agrees to sell the home and move into an assisted living community.
Was this father forced or unduly influenced? It’s possible.
There is nothing inherently wrong with the son expressing his feelings or wishes, but there is a point where the father’s dementia likely resulted in his wishes being ignored and resulted in his choice being substituted for that of the son’s.
In this case, you can call into question the enforceability of a contract like this.
Can They Sell Their Home?
The answer is that it depends. If you’re confused, you’re not alone. Contract law is a complicated area of law. When it comes to a patient with dementia, each case is evaluated based on its own circumstances.
If competency is established, then a person with dementia can sell their home. If there are issues with competency, you need to seek legal help.
In this case, you may need to establish an alternative method for selling the home. Some examples include:
- Power of Attorney
- Conservatorship
- Guardianship
Of course, you need to go before the court and seek legal counsel to establish proper authority to sell a home on behalf of an aging parent with dementia.
These agreements must meet the same criteria listed in this post.
Selling A Home?
As mentioned, we’re a real estate agency service. If you need help selling your home for a parent with dementia, contact us. We specialize in helping adult-children sell their parent’s home — from dementia, to probate, to an inherited home.
We’re the experts on helping adult-children.
