Can You Sell a House Before Probate?

Can You Sell a House Before Probate?

As a lawyer in Medicine Hat practicing in Estate Administration, this question comes up fairly regularly. There are a variety of reasons why an executor wants to sell a home promptly after the deceased’s passing. There may be an offer “in the wings”. In some cases the executor wishes to reduce the carrying costs of the home such as property taxes, utilities, condo fees or yard maintenance. The executor might be interested to hit the market at a certain time (like spring or summer).

Title to the residence needs to be first transferred to the executor before it can be sold. This is called a transmission. The Grant of Probate and the transmission are submitted to Land Titles to put the title in the name of the executor. From there the title can be transferred from the executor to the buyer in order to complete the sale.
Probate takes time. While it can vary from case to case, a range from 3 to 6 months is not unusual. If the executor is prepared to wait until the grant of Probate to sell the house, or the buyer is prepared to wait until the grant to take possession, there is no problem.

There are a number of alternatives to waiting for the grant of Probate. Each has its own unique pros and cons.

The executor and the buyer could agree to let the buyer take possession on a tenancy-at-will basis. A tenancy-at-will is an agreement where the seller allows the buyer to take possession of the residence without the money being paid to the seller. This means the buyer is ready to request the bank to advance the mortgage funds and their lawyer is holding the remaining cash to close, or the buyers’ lawyer has forwarded the funds to the Seller’s lawyer on trust conditions that the funds cannot be released until the transfer of land is provided to the buyer. The buyer in possession pays for property taxes and utilities. The buyer may pay rent to the seller as may be negotiated, until the money is releasable to the seller. The risks to the executor are what if the deal falls through, what if the buyer starts renovations or causes damages to the property?

A second option is to request a rush on the application for Probate. What you need to understand is a “rush” is in the courts’ discretion. If the court does not accept the reason for the rush, it can be denied. A rush may not significantly reduce the amount of time the application for a Grant of Probate may take.

A third option is to apply to the court for a Limited Grant of Probate. A limited grant requests the court to grant Probate for a specific purpose; in this case it would be to complete the sale. The estate will still need to complete a full probate application. This makes the grant of probate a 2 step process which increases the costs to the estate. In this option you are trading off cost for certainty.

In the perfect world, the real estate contract would say the possession will occur after probate is granted. Most buyers, understandably, want a fixed date they can work towards. It light of that, it is important for executors to communicate early on to their lawyer their timing preference for selling the estate residence. This would allow for an exploration of all the options to determine the one best suited.

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Les Scholly
Les Scholly helps you navigate the turning points of life. He is a partner with Pritchard & Co. Law Firm, LLP and member of the Society of Trust and Estate Practitioners (STEP). Contact Les at 403-527-4411 or at lscholly@pritchardandco.com