Can I sell a house that belonged to someone who has died?

Who has the authority

Under section 2 of the Estates Administration Act, a deceased owner's real property vests in their personal representative, the estate trustee, who holds it for the people entitled under the will or on intestacy. The executor named in a will is that trustee. If there is no will, nobody has authority until the court appoints an estate trustee without a will.

Check title first. A home held in joint tenancy passes to the surviving joint owner by survivorship and is not an estate asset. Where several trustees are named, the Act does not allow one of them to sell without the others or a judge's authority.

Probate comes first

The land registry will not register a transfer signed by an estate trustee without a Certificate of Appointment of Estate Trustee, with a narrow exception for property never dealt with since it entered the Land Titles system. The application goes to the Superior Court of Justice with estate administration tax paid on the value of the estate, including the home; the province publishes the current rate and any small-estate threshold.

You can list and even accept an offer while the application is pending, conditional on the certificate issuing, but a firm closing date has to respect the court's timeline, which varies by region.

The beneficiaries and the price

If the will gives the trustee a power of sale, the beneficiaries' consent is not required, though informing them avoids objections later. If the will is silent and the sale is only to distribute the estate, section 17 requires the concurrence of a majority of the beneficiaries holding at least half the interests. Where beneficiaries cannot agree, the trustee can ask the court for directions.

The trustee's duty is to obtain the best price reasonably available. Get a written appraisal or opinion of value, market openly and keep every offer. A sale to a trustee, a beneficiary or a relative at less than demonstrable market value invites a claim.

Tax when an estate sells

Section 70(5) of the Income Tax Act treats the deceased as having sold the home at fair market value on the date of death. If it was their principal residence, the exemption is claimed on their final return. Any change in value between death and the estate's sale is the estate's own gain or loss and is reported on the estate's return.

Before distributing the proceeds the trustee should obtain a clearance certificate from the CRA or hold back enough to cover tax, because a trustee who distributes first can be personally liable for what the estate owes.

The three-year rule and other traps

Section 9 of the Estates Administration Act provides that real property not sold or conveyed within three years of death vests automatically in the beneficiaries unless the trustee registers a caution on title before then. A trustee approaching the third anniversary with the home unsold should get advice about the caution.

In the meantime the house is the estate's responsibility: tell the insurer it is vacant, keep the heat on, keep paying the mortgage and taxes from estate funds, and do not distribute contents before the will's gifts are known.

Closing as an estate

The trustee signs the transfer in that capacity and the certificate is referenced on title. The trustee also signs the same declarations and undertakings an ordinary seller would, and a spouse's consent may still be needed if the deceased's surviving spouse has rights in the home. Proceeds go into the estate account, never to a trustee personally, and are recorded in the estate accounts with the commission, legal fees and adjustments so the beneficiaries can see how the house became a number.

We prepare the trustee's closing documents and check that the certificate, the consents and the tax position are settled before you sign.