Vacant Estate Home in Ontario: Insurance, Tax and Utilities

After a death, the family home often sits empty for months while the will is located, the certificate is sought and a sale or transfer is arranged. An empty house is a risk: a pipe can burst, a fire can start or the property can be targeted, and an insurance policy may not respond the way you expect.

This article explains how Ontario's statutory insurance conditions treat a vacant home, who has authority to act, and who generally pays for upkeep. Property tax and utility rules and each insurer's wording vary, so confirm those details directly.

Who is responsible for the house

A deceased person's property, including the home and its contents, vests in the personal representative, who holds it as trustee. In Ontario, only an estate trustee has legal authority to manage or distribute an estate, which includes selling the home or clearing it out.

What this means for you depends on whether you are the named estate trustee or a relative who is not. If you are not the trustee, it is generally safest to work with the trustee rather than acting alone, for example by changing locks or removing belongings, because that authority rests with the estate trustee. How this applies depends on your situation, so it is worth confirming with a lawyer.

How vacancy affects insurance

The statutory conditions are deemed to be part of every fire insurance contract in force in Ontario, including home policies covering fire, and no variation of them binds the insured.

Under Statutory Condition 4 (Material Change), a change material to the risk that is within the insured's control and knowledge voids the contract as to the part affected unless promptly notified in writing to the insurer or its agent. A house left vacant after a death can be such a change. Once notified, the insurer may cancel, or may require an additional premium to be paid within fifteen days.

Under Statutory Condition 5, the insurer may end the contract on 15 days' notice by registered mail, or on five days' written notice delivered personally or by other permitted means. The insured may end it at any time on request. Do not cancel the existing policy until replacement cover is confirmed.

Many policies also have their own vacancy or unoccupied wording, with limits that differ from insurer to insurer. Read your policy and ask the insurer or broker in writing what applies to an estate home and whether a vacancy endorsement or separate policy is needed.

Who pays the carrying costs

How insurance, utilities, property tax and repairs are paid while the trustee holds the house depends on your situation, so it is worth confirming with a lawyer. The residuary estate, real and personal property, pays the deceased's debts rateably according to value, subject to a contrary intention in the will and to s. 32 of the Succession Law Reform Act.

If the home is mortgaged, the beneficiary who receives it takes it subject to the mortgage unless the will or another document shows a contrary intention. A general direction in the will to pay debts out of the estate is not enough by itself to shift the mortgage off the home. Lender practice and municipal tax and utility rules vary, so contact the lender and the municipality early.

A trustee is entitled to a fair and reasonable allowance for their care, pains and trouble, as allowed by a judge of the Superior Court of Justice. Keep receipts for everything you pay, because the trustee may need to account to the beneficiaries.

If a spouse with no interest in the matrimonial home is living there when the other spouse dies, they may stay in possession against the estate, rent free, for sixty days after the death. The estate may still need to keep the insurance in place during that time.

Practical steps to protect an empty home

• Notify the insurer in writing as soon as the house is or will be vacant, and keep a copy.
• Ask whether the policy needs to be changed, and what conditions apply to heat, inspections and water shut-off.
• Check the home regularly and keep a log of visits.
• Keep utilities on at a level that prevents freezing, or follow the insurer's instructions if they require shutting down water.
• Secure valuables and important papers, and do not give out keys without the trustee's approval.
• Photograph the contents and condition of the home for the estate's records.

What to do next

• Confirm who the estate trustee is and what authority they have.
• Call the insurer or broker and follow up by written notice of the death and vacancy.
• Read the policy wording on vacancy and unoccupied homes.
• Contact the mortgage lender, the municipality and the utility providers to confirm account arrangements.
• Record every estate expense and keep the receipts.
• Speak with a lawyer if there is a dispute among beneficiaries or a claim related to the home.

Frequently asked questions