FROM PROBATE TO COMPLETION: HOW TO AVOID DELAYS WHEN SELLING AN INHERITED PROPERTY
INHERITED A HOUSE? SEVEN THINGS TO KNOW BEFORE SELLING A PROPERTY AFTER PROBATE
Selling a home following a death can involve probate, inheritance issues, missing property information and disagreements between beneficiaries. Property expert Eve Cooke, Managing Director of Montrose Brown Law, explains some of the questions executors, beneficiaries and buyers should consider before a probate property reaches the market.
Selling a property is rarely entirely straightforward. Doing so while administering the estate of someone who has died can add another layer of legal, financial and emotional complexity.
For executors and beneficiaries, questions can range from whether the property actually needs to be sold to when it can be marketed, where the proceeds should be held and what happens if there is no will.
Eve Cooke, Managing Director of Montrose Brown Law, says mistakes made early in the process can contribute to delays later.
“Selling property post-probate can be very challenging and, if and when the day comes you have to do it, you are likely to have to navigate a myriad of challenges,” Cooke said.
“One mis-step and you could end up facing delays and bottlenecks in what can already be a stressful and emotional process.”
Here are seven issues she says executors, beneficiaries and prospective buyers should understand.
1. YOU DON’T NECESSARILY HAVE TO SELL THE HOUSE
A death does not automatically mean an inherited property has to be put on the market.
Cooke says beneficiaries named in a will may instead be able to transfer the property into their own names. They could then choose to live in it, rent it or sell it at a later date.
That decision does not necessarily remove tax considerations, however, and Cooke notes that inheritance tax may still apply.
2. UNDERSTAND WHAT PROBATE ACTUALLY DOES
Probate provides the legal authority required to deal with a deceased person’s property, money and possessions.
Where a valid will exists, the executor named in it is responsible for administering the estate and distributing assets after relevant debts and taxes have been dealt with.
Understanding who has authority to act is therefore fundamental before proceeding with a property transaction.
3. MARKETING AND COMPLETING A SALE ARE DIFFERENT THINGS
Cooke says that, in most cases, a probate property sale cannot complete until a Grant of Probate has been obtained.
The grant demonstrates the legal authority to deal with the estate.
There can be exceptions involving jointly owned property, where a surviving spouse or partner may be able to sell without waiting for probate, depending on the circumstances.
However, waiting for the grant does not necessarily prevent a property being put on the market.
Estate agents can market a probate property while probate is pending, Cooke says, provided buyers are told that the transaction is dependent upon the grant being issued.
That creates a commercial consideration: some buyers may be wary of uncertainty around exchange and completion dates.
4. NO WILL MEANS A DIFFERENT PROCESS
Where somebody dies without a will — known as dying intestate — the process changes.
Instead of a Grant of Probate, Cooke says a Grant of Letters of Administration is required.
The estate is then dealt with under intestacy rules, which determine who can inherit.
For families dealing with a property alongside the wider estate, establishing the correct legal authority early can therefore be important.
5. THE SALE MONEY BELONGS TO THE ESTATE
One potentially important misconception concerns what happens to the money when an inherited property is eventually sold.
The proceeds belong to the deceased person’s estate rather than personally to the executors, even where those executors are also beneficiaries.
Where solicitors have been appointed to administer the estate, Cooke says the sale proceeds can be sent to them so the assets can ultimately be distributed in accordance with the will.
Where no solicitor is administering the estate, executors may need a dedicated executor’s account.
Cooke cautions that these specialist accounts can take time to establish, making it sensible to address the issue early rather than waiting until a sale is approaching completion.
6. PROPERTY PAPERWORK CAN BECOME A PROBLEM
Executors may not know a property as well as the person who lived there.
That can create practical difficulties when questions arise over alterations, guarantees, certificates, maintenance history or other documentation normally expected during a transaction.
Cooke argues that obtaining specialist legal advice early can help identify problems before they become obstacles later in the sale.
“Probate sales carry legal complexities that don’t arise in a standard transaction, from proving the grant of probate to handling disputes between beneficiaries or gaps in a property’s paperwork,” she said.
“Instructing a solicitor who specialises in this area early on can prevent delays further down the line.”
7. BUYERS SHOULDN’T ASSUME ‘CHAIN-FREE’ MEANS SIMPLE
Probate properties can be attractive to buyers because they are often chain-free.
But that does not necessarily make the transaction quicker.
Delays in obtaining probate, incomplete paperwork and the executor’s limited knowledge of the property can all complicate a purchase.
Cooke strongly recommends that buyers obtain a full house survey.
For sellers, meanwhile, preparation can be particularly valuable. Establishing who has authority to sell, addressing estate banking arrangements, gathering property documents and understanding the probate timetable can reduce the chances of avoidable problems emerging once a buyer has been found.
The central lesson is straightforward: an inherited property may look like an ordinary house sale, but the legal circumstances behind it can make the transaction anything but ordinary.
