Advice on how to make the process as smooth as possible
When someone dies, all their belongings and property vest in their personal representatives who must enter into any agreement to sell the property and sign the necessary transfers, which are called ‘assents’.
Selling a home when someone has died is similar in many ways to a conventional property transaction. However, there are some important differences and additional procedures you must follow. This can mean a sale takes longer or is more complicated, but there is a lot you can do to make things easier.
Check you can deal with the property
Ideally, your loved one will have made a Will and their wishes will be clear. If you are named as executor, you may decide to renounce this role. However, you will then have no say over the administration or sale of the property.
If there is no Will, then the situation is more complicated. There are rules which determine who can be a personal representative, known as an ‘administrator’. This will usually be the closest surviving relative. In this case, you will need to apply to the probate court for authority to act.
You will need the certificate from the Probate Registry formally recognising your authority to act before you can enter into any agreement to sell a property. Your lawyer will also need to see this, in addition to evidence of your identity, as part of the mandatory checks they must carry out.
Identify the property
Usually, you will know about any property your loved one had, particularly if this was also the family home. However, you should check they were in fact the legal owner.
Most land is now registered, and your lawyer can confirm ownership by carrying out a simple search at the Land Registry. This can also be useful for establishing the extent of the property and any outstanding mortgages.
Sometimes the title has not been registered, for example because the property has not changed hands for a very long time. In this case, you will need to find the deeds. They could be in the property or a place of safe keeping, such as a bank or solicitor’s office. If there is an outstanding mortgage, the lender is likely to have the deeds and your lawyer will request them. Otherwise, locating them may involve some detective work. If this fails, your lawyer may be able to reconstitute the title and apply to the Land Registry for its registration based on the available information.
Dealing correctly with jointly owned property
If your loved one owned property with someone else, you will need to work out whether they were a joint tenant or a tenant in common. If they were a joint tenant, the property will not form part of their estate. Instead, it will pass automatically to the surviving co-owner(s). Conversely, if they were a tenant in common, you will have to deal with their share under their Will. For example, if your loved one left their share in the matrimonial home to their surviving spouse, you will need to transfer it to them. The surviving spouse may then become the sole legal and beneficial owner and deal with the property in their own name.
If you are not sure whether your loved one was a joint tenant or tenant in common, your lawyer should be able to tell from the register of title at the Land Registry. However, your lawyer may need to look at the original transfer to check this. It is also possible the situation may have changed, so it is important to share any information you may have with them.
Decide on the valuation you need
A formal valuation can help ensure you deal with the estate properly and this will be needed for calculating any inheritance tax (IHT). You can ask a local estate agent for this, or commission a report from a chartered surveyor.
An estate agent may agree to give a market appraisal for probate purposes without charge, but their valuation may be on the high side if they hope to attract business. Asking three agents, then averaging their valuations could counter this.
However, paying for a professional valuation from a chartered surveyor may be the better option if the property is high-value, non-standard, or if there is any risk of contention.
You will usually need to agree and have paid any IHT due before the Probate Registry will issue the grant of probate. Unfortunately, agreeing the correct IHT market value of a property is not always straightforward. HMRC will take advice from the District Valuer and may not agree with your figures.
Having a robust valuation report and the right professionals on board, will help in any negotiations. This is especially important if you find yourself in a catch 22 situation because you need to sell the property to pay the IHT due. In that case, you may need to take out an executor’s loan or ask HMRC for credit. So, knowing the true value of the property is essential.
What can you do before the grant of probate?
Executors and administrators perform a similar role. However, an executor derives authority from the Will, and the grant of probate simply confirms that authority. In contrast, an administrator is only authorised once they have the grant of administration.
This distinction has practical implications. If you are an executor, although you cannot enter a sale contract before obtaining the grant, you can manage the property and start preparing it for sale. For example, you may decide to clear the property out, or choose an estate agent to market it. In contrast, a person entitled to become the administrator should ordinarily wait until they obtain the grant.
If you do decide to put the property on the market, our lawyers can help to carefully manage the gap between accepting any offer and getting the grant of probate.
Collecting property information
If you want to get ahead, there are things you can do to prepare the property even before marketing it.
As well as carrying out any necessary maintenance, gather as much information about the property as you can. For example, you may find old title deeds, evidence of mortgages being paid off, or guarantees for double glazing or building works.
Completing the Property Information Form and answering the buyer’s pre-contract enquiries can be difficult when you lack relevant personal experience. So, any paperwork telling you about the property may help especially if the property is an apartment or other leasehold. The buyer will want evidence that ground rent and service charge payments are up to date, and any necessary consents from the landlord, for example, for alterations, are in place.
It is not uncommon for a sale by personal representatives to take a little longer than a conventional one. This is mainly down to the time it can take to obtain the grant of probate. However, you could use this time to ensure the property’s title is in order and to address any potential issues. For example, a charge which has been paid off may still be registered against the property, or the register may show a restriction which is no longer relevant. Your buyer will need these removed before completion. Investigating and resolving them now will save you time later. If you are physically preparing the property for sale, why not ask your lawyer to audit the title at the same time?
How we can help
Our lawyers are experienced in probate property sales and we understand the special demands you will face as a personal representative.
For further information, please contact Claire Hogben in the residential property team on 01832 270529 or email [email protected].
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