What does the imam do if he remembers that he is not in a state of ablution, for example in the third rak'ah?

The questioner : If there is a congregation, for example of four rak'ahs, and the imam's ablution becomes invalid in the second rak'ah, how does the imam handle this situation? Does the prayer of the followers become invalid?

The Shaykh : No, it does not become invalid. Here, the matter can be handled in one of two ways. The first way, which is the easiest, is for him to appoint one of the people behind him to lead the rest of the prayer with the congregation. He then leaves, performs ablution, and follows this same deputy whom he appointed. The second scenario is one that rarely occurs because it is not feasible in these mosques, but it is possible in some houses if this situation arises. The imam indicates to the congregation to remain as they are. If he remembers while they are standing, they complete standing; if they are bowing, they complete bowing; if they are prostrating, they complete prostrating. He then gets up, performs ablution or a full ritual bath, and returns to find the people waiting for him as he instructed, and he continues the prayer with them. You see that this scenario is like a hypothetical one.
Al-Halabi : Some people invalidate the prayer in this case.

The Shaykh : But we have done this perhaps more than once; it is not common for us, of course. Yes.