Selling the House as Executor in Ontario: Steps and Timing

When someone dies owning a home, the executor is usually the person who has to decide whether to keep it, rent it or sell it. The house is often the largest asset, and a rushed decision can cause problems with beneficiaries, creditors and the CRA.

This article walks through the general order of events in Ontario: who owns the house at death, when you can reasonably list it, who has to agree, and what happens to the money. Every estate is different, so use this as a map and not as a substitute for advice on your own file.

Is the house actually part of the estate?

Generally, the deceased's property, other than property passing by survivorship, vests in the personal representative as trustee, subject to payment of the deceased's debts.

There is an important exception. A home held with a right of survivorship, such as a jointly owned home held as joint tenants, does not vest in the personal representative. It passes to the surviving owner and is not part of the estate the executor sells. Before you plan anything, check how title is held on the property records and how the deceased's share was held.

When can you list the house?

If the deceased owned real property, the estate normally must be probated, although Ontario's official guidance also says probate is not always required to administer an estate. In practice, a buyer's lawyer will want proof that you have authority to sell, so most executors do not sign a sale agreement until that authority is in hand.

A person named as estate trustee in a will does not have to act. If you do apply, a bond must be filed with the probate application where the deceased died without a will, you were not named as estate trustee, or you do not live in Ontario, another Canadian province or territory, or a Commonwealth country. A bond is not required for a small estate unless a beneficiary is a minor or incapable.

Once you receive the certificate of appointment, you must file an Estate Information Return within 180 calendar days. That deadline runs alongside the sale, so keep it on your calendar.

While you wait, you can usually prepare the house. An estate trustee who believes an expense is properly incurred in carrying out the trust may pay it from estate property, or pay it personally and recover it from the estate, with insurance or utilities on a vacant house given as examples. The court may later disallow the payment or recovery. Check your insurer's rules for vacant homes, since those depend on the policy.

Who has to agree to the sale?

The personal representative may sell real property to pay debts and also to distribute or divide the estate. Where the sale is made only to distribute the estate, it needs the approval of the majority of the persons beneficially entitled.

If there are several executors and one of them dies, the powers of the personal representatives vest in the survivor or survivors unless the will provides otherwise. If co-executors are deadlocked, a person with a financial interest in the estate can apply for directions. If an executor or a family member wants to buy the house, that raises questions that depend on the facts. As a general principle, it calls for the informed written consent of the beneficiaries or court approval, so get advice first.

Closing the sale and handling the money

A person who buys real property in good faith and for value from a personal representative, in an authorized manner, takes it free of the deceased's debts, subject to stated exceptions. That protection is a reason to follow the approval steps carefully.

The sale proceeds belong to the estate and are not yours to divide right away. Ontario's guidance describes distribution as happening once assets have been liquidated and the funeral and burial expenses and any debts have been paid. A personal representative who gives the notices to creditors that the court would have directed may distribute without liability to people whose claims they had no notice of, but that protection does not extend to heirs, next of kin, devisees or legatees claiming as such.

Tax matters too. The executor must file all required returns for the deceased and make sure any balance owing is paid before distributing the estate. If you distribute assets without a clearance certificate and tax is owing, you are personally liable for the unpaid amounts, up to the value of the assets distributed. Keep accurate records of the sale and every related payment.

What to do next

Real property that is not conveyed or distributed within three years of death vests in the beneficiaries, unless the personal representative registers a caution. A caution delays vesting for three years from its registration. This is a long runway, but it is a reason not to let the house sit without a plan.

• Confirm how title is held and whether the house passes by survivorship.
• Confirm whether probate is needed and who will apply.
• Insure and secure the house, and keep receipts for every expense.
• Identify every beneficiary, including any minor or incapable person.
• Get the required approvals in writing before signing a sale agreement.
• Pay debts, deal with the CRA and hold proceeds in an estate account until you can distribute.
• Speak with a lawyer if beneficiaries disagree or if anyone wants to buy the house.

Frequently asked questions