Pre-emergence Damping Off
A grass seed which has germinated but no leaf has emerged, and the seed then rots. Common fungal pathogens are Fusarium spp, Pythium spp, Dreschlera spp, and Rhizoctonia spp. This condition is sometimes just called Seed Rot although there is a technical difference as to whether the seed has germinated and not emerged or just not germinated at all (which is the formal definition of Seed Rot), but for practical purposes pre-emergence damping off can be called seed rot.
An increased likelihood of this damping off occurring is due to sowing seed at the wrong time of year, especially when it is wet and cold, sowing onto a poorly prepared seed bed, and when the soil retains a lot of moisture keeping the soil surface wet. The use of old grass seed, which will typically have a low viability for germination is also another contributory factor in seed rot and it is usually good practice to sow fresh, new seed each year rather than use up old seed from the previous year, unless ideal storage conditions, which would be unlikely, have been maintained.
To reduce the chance of damping off occurring then aim to produce a well-prepared seed bed, sow at times of the year when rapid seed germination is expected and use new seed which is viable and with good germination potential.