Selling Estate, Inherited or Subject to Probate Homes or Land in Victoria
When someone passes away, often a family member or close friend is named the Executor and is responsible for settling the Estate. This often includes selling the deceased parent’s or friend’s real estate holdings, whether that is a house, condominium, townhome or land.
If the Executor named in the Will declines to act as Executor, or there is no Will, the Court appoints someone to act as Administrator.
Being named as the Executor or Administrator for a loved one who has died can be particularly difficult. In addition to dealing with the complexities of settling the Estate and selling the loved one’s home, you are often in the midst of the grieving process.
Prior to a new owner being able to take title to a property in an Estate, the Estate has to go through a process to legally confirm that the deceased’s Will is their last valid Will and that the Executor named in the Will has the right to receive the assets of the deceased. At the end of the process, probate is granted by a BC Probate Court and the real estate goes into the name of the Executor. The Executor can then transfer title to a buyer.
One of the most common questions we are asked is whether you can list a property for sale in British Columbia before probate has been granted.
The short answer is yes, you can list the home for sale prior to probate being granted, but there are several things you should consider as the Executor of the Estate, when it comes to selling a home after someone has passed away.
Question: Since one cannot transfer the home’s title to a new owner until probate is granted is it better to wait until you have been granted probate before listing the house for sale?
Answer: It depends. In a seller’s market* which Greater Victoria has been experiencing, it may be in the Estate’s best interest to list the home for sale sooner. Even if the Estate is straightforward, the probate courts can be backed up and getting a grant of probate can take months. In that time, the real estate market could shift and the home you are needing to sell could end up being worth less money after probate is granted and you go to list it. In addition, the Greater Victoria real estate market, which includes Oak Bay, Sidney, Saanich and the Westshore, traditionally experiences seasonal shifts. The time of year when probate might be eventually granted may not be the optimal time to sell a home.
For this reason, and others, it is sometimes advantageous for an Estate to list a home for sale and have an accepted offer and firm commitment from a buyer before probate is granted.
In a seller’s market, there are typically many buyers who will consider purchasing a home that is subject to probate. When acting for a home seller in a probate situation, it is important that the contract of purchase and sale is properly drafted; otherwise, a home buyer may be able to successfully challenge the contract and walk away from the home purchase with no consequence. This rarely happens, as both the buyer and the seller normally want to proceed with the transaction. However, if the real estate market suddenly falls or “corrects”, a buyer, who has not yet been taken title, might have a change of heart and decide to challenge the contract.
Question: Can a home buyer move into the property before probate has been granted and title has passed to the buyer?
We often have situations in which an Estate receives an excellent offer from a home buyer, but the buyer wants to take possession of the home prior to the granting of probate. This typically occurs when a buyer has sold their own house and will be without a home before the grant of probate is expected. In these situations, we have clauses that we include in the contract, that allow the buyer to move into the home prior to taking title of the property. The advantage to the Estate is that, in a properly drafted contract, once the buyer takes possession, the buyer typically becomes responsible for property taxes, utilities and repairs, and, if it is a strata property, strata fees and special levies. In addition, insurance companies prefer that homes are not left vacant. There are risks in entering this type of arrangement, which we discuss with home sellers who are Executors of Estate property, to make sure they understand and are comfortable with the risks and they are well protected.
Question: My mom recently died and I have inherited her home. I want to sell the property, but I am not that familiar with it, is that going to be a problem when I want to list the home for sale?
As part of our services when we list a property for sale, we provide an in-depth market valuation so you will know what price the home should be listed for in the Victoria market. We also put together a complete marketing package including professional photos, floor plans and even staging services when needed.
We also discuss what, if any, representations you, as Executor, can make about the property and the risk of doing so. In most non-Estate sales in British Columbia, the home seller provides a series of representations to potential buyers in a document called the Property Disclosure Statement (PDS). The PDS is normally attached to the offer to purchase. If any of the statements in the PDS are untrue and the home buyer suffers damages relying on the untrue statement, the buyer can successfully sue the seller for those damages. Although there are exceptions, in most Estate situations, neither the Executor, nor the heir, is sufficiently familiar with the property to provide representations to potential buyers. So, we typically recommend that no representations be given in a PDS.
In addition, in Estate situations, we typically recommend special language which makes it clear that neither the Executor, nor the agents, have made, or are deemed to have made, any representations.
Handling the Estate of a loved one is often filled with difficult emotions and numerous tasks that need to be completed. We’ve helped many Executors sell property on behalf of the Estate both before and after probate has been granted. If you have questions about listing an Estate property, contact us. We strive to make it as stress-free and seamless as possible and can guide you and your family through the Estate selling process.
*When this article was written in August of 2021 the Victoria was in a seller’s market, where inventory was very low and property prices were increasing. We were also experiencing multi-offer situations in which homes were very often being sold over the list price.
TOGETHER, Hal Decter, LL.B. and Audra Poole bring a unique level of knowledge, experience and service that is hard to find.
For eleven years, Hal Decter was a practicing real estate lawyer and partner with one of Canada’s top law firms. His client experience ranges from some of the country’s largest corporations to individuals and couples starting their first businesses or buying their first homes.
Audra Poole brings her research acumen and luxury marketing and sales talents to the team. She is a highly respected marketing and public relations executive with more than twenty years of local, regional and international experience.
Whether you are looking to buy or sell a home in Victoria, Oak Bay, Sidney or Saanich – we’ll be on your side and make the process as stress free and seamless as possible.