Who Pays Utilities and Upkeep on a Deceased Person's Home in Ontario?

A house does not stop costing money when its owner dies. Heat, hydro, water, insurance, property taxes and repairs keep coming, and the bills often land on the nearest relative or the named executor. Many people pay out of pocket without knowing whether they will get the money back.

This article explains in general terms who has authority over the estate, how house costs connect to the estate's debts, and how to keep good records. Details depend on your facts, so it points out where a lawyer or accountant should confirm the answer.

Who is responsible for the house after a death

The estate trustee is the only person with legal authority to manage or distribute an estate. Winding up the estate includes paying taxes, bills and debts, collecting assets and distributing the residue to those entitled. Who ultimately bears the cost of keeping the house safe and in repair during that time depends on the facts, and a lawyer can confirm the answer for your situation.

In practice, though, someone has to pay the utility company before the estate has any money available. If you are the executor, you may be paying from your own funds while waiting for the estate to be set up. If you are a relative who is not the estate trustee, you have no legal authority over the estate, so speak to the person who does before spending large amounts.

Where upkeep fits among the estate's debts

One of an estate trustee's fundamental duties is to ascertain and pay the estate's debts and liabilities. Ongoing bills for the house, such as utilities and insurance, may be part of that picture, along with any mortgage or line of credit.

Debts also matter for tax on the estate. Ontario values real estate at its appraised value on the date of death, less encumbrances such as a mortgage or lien, but other debts such as credit cards and lines of credit cannot be deducted. For certificates applied for on or after January 1, 2020, Estate Administration Tax is $15 for every $1,000 (or part thereof) of estate value over $50,000, and no tax is owed on an estate of $50,000 or less. Confirm the current rate when you apply.

Mortgages and lenders

If the house has a mortgage, contact the lender early and ask what it needs from you. A court-enforced mortgage sale is not triggered simply by the passage of time after death. Under Part III of the Mortgages Act, power of sale requires a default of at least 15 days and at least 35 days' notice to interested parties, and everyone with a registered interest must be served. Check the statute for the current text.

A reverse mortgage works differently. Its balance becomes due when the borrower sells, moves out, defaults or dies. The estate usually has limited time to repay, and each lender sets its own policy. Interest costs and often fees are added to the balance, so delay can be expensive. Ask the lender for its timeline in writing.

Keeping records if you pay for the house

If you have covered house costs personally, keep clear records and let the estate trustee know what you are spending. If you are the estate trustee, track the expenses carefully. Whether and how repayment is allowed, and whether any compensation is appropriate, depends on the facts and is something to confirm with a lawyer for your estate.

• Keep every utility bill, receipt and invoice, and note the date and purpose
• Pay from an account that creates a clear paper trail
• Avoid large repairs or improvements without checking with the estate trustee or a lawyer
• Do not mix estate money with your own funds
• Tell the other beneficiaries what you are spending, to avoid disputes later

What to do next

Taxes also run on a timetable. For a death from January 1 to October 31, the final return is due by April 30 of the following year, and for a death from November 1 to December 31 it is due six months after death. Property sold by the estate later is reported on the T3 return.

• Confirm who the estate trustee is and what authority they have
• List the monthly costs of the house and who is paying each
• Contact the utility providers, insurer and any lender about the death
• Start a simple spending log with receipts
• Ask the lender about timing on any reverse mortgage
• Speak to a lawyer about reimbursement and to an accountant about the final return

Frequently asked questions