Selling an Inherited House in Ontario: Steps and Legal Rules

Selling a house you have inherited, or one you are managing as executor, is not the same as selling your own home. Before a buyer's lawyer will close, they need to see that the person signing actually has the authority to sell.

This article explains in general terms who can sell, why an estate certificate usually matters, and how title reaches the buyer. Every estate is different, so a lawyer should confirm the steps for yours.

Who has authority to sell

Property the deceased held without a right of survivorship passes to, and vests in, the estate's personal representative as trustee. That is usually the executor named in the will. Heirs do not automatically have the right to sell just because they are named as beneficiaries.

A personal representative may sell real property to pay debts without the beneficiaries' agreement. A sale made only for distribution needs the beneficiaries' agreement, or approval by a majority holding at least half the interests, plus the Children's Lawyer or the Public Guardian and Trustee where relevant.

If the sale affects a minor's interest, it needs the Children's Lawyer's written approval or a judge's order.

The estate certificate and probate

If the deceased owned real property, the estate normally has to be probated. Probate is not always needed, as it depends on the type of assets in the estate. Estate Administration Tax is paid as a deposit when applying for probate.

Since April 1, 2021, an estate worth $150,000 or less can use the small estate probate process, which results in a Small Estate Certificate. An Estate Information Return must be filed within 180 calendar days of receiving the certificate.

There is a narrow exception for land converted from the Registry system to Land Titles. The requirement for a certificate of appointment of estate trustee can be waived only for that property, and the applicant's affidavit must meet set conditions, including that the transaction is the first dealing after conversion. Most estates will not fit this exception, so do not assume it applies.

How title reaches the buyer

Ownership changes are registered electronically by authorized users, such as Teraview account holders. ServiceOntario cannot search title, give legal advice or explain property records, and refers people to a lawyer, title searcher or surveyor. Anyone can search property records on OnLand for a fee.

In practice, the lawyer for the estate shows the buyer's lawyer the proof of authority and arranges the transfer. Any mortgage on the property is paid from the sale money and discharged, and unpaid property taxes, which rank ahead of every other claim except the Crown's, will also need to be dealt with.

Special situations to watch for

• Three years after death: real property not sold or distributed within three years of death vests in the beneficiaries, unless the personal representative has registered a caution. A caution lasts three years and can be renewed.
• Co-owners who disagree: joint tenants, tenants in common and coparceners may be compelled to partition or sell the land. Where land is held by will or intestacy, no partition proceeding may be started until one year after the death.
• Minor beneficiaries: written approval from the Children's Lawyer or a judge's order is needed for a sale affecting a minor's interest.
• A tenant living in the house: a landlord who has agreed to sell a residential complex of no more than three units may give notice ending the tenancy for the purchaser's own use, if the purchaser in good faith requires the unit for residential occupation. The termination date must be at least 60 days after notice is given, and the selling landlord must pay one month's rent or offer another unit.

What to do next

• Locate the will and confirm who the named executor is.
• List the estate's assets and debts, including any mortgage and property tax balance.
• Ask a lawyer whether the estate needs full probate or can use the small estate process.
• Talk to the other beneficiaries before listing, and note any minors.
• Keep the house insured, secured and maintained while the sale is arranged.
• Do not sign a sale agreement until your authority to sell has been confirmed.

Frequently asked questions