Where a deceased person leaves a property, what happens to their interest in it after death, depends on how they owned it and whether or not they left a Will. It is important to establish if the property needs to be dealt with as part of the Probate process or falls outside of it. It is usually the most significant asset a person leaves and forms a major part of dealing with the affairs of the deceased. In many cases, there will be family members with a connection to the property, which may be emotional or financial, which needs to be taken into account.
How is the property owned?
The first step in dealing with a property is establishing how it was owned and whether or not a Grant of Probate is required in order to sell it. Where a property is owned as joint tenants, then the deceased’s share ordinarily passes to the other joint tenant on death, who can then deal with the property as they wish. The remaining joint tenant can keep the property or sell it on, in which case no probate process is needed.
If the ownership was based on a tenancy in common, then the deceased’s share will form part of their estate and a Grant of Probate will be needed in order to deal with it. If there is a Will, then the Executors will take on the responsibility for realising the proceeds of the deceased’s share. Where there is no Will, then Letters of Administration will be needed to sell it. The sooner this is dealt with, the better, especially if the property has to be sold to settle debts.
If the deceased owned the property in their sole name, then it will form part of the general assets of the estate and will need to be transferred to beneficiaries or sold.
How to Sell Probate Property
The first step is to obtain a valuation of the probate property and to pay any inheritance tax that is owed.
The sale of a property as part of a probate process is similar to any other form of conveyancing, except that where a Grant of Probate is required, or there are disputes to resolve, it can add significantly to how long the process takes.
If the property is empty, then it can be devalued unless it is properly maintained, and it will need to be insured once it is vacant for 30 days as well as being kept secure.
There is nothing to prevent the property from being put on the market, prior to the Grant of Probate to expedite the process. In fact, it can be advantageous to secure a buyer and then await the Grant.
Responsibilities of Executors/Personal Representatives
It may seem obvious but dealing with a property presents a number of practical issues for Executors. They will need to locate and make available to buyers, important documentation relating to the house, for example, planning permissions and guarantees.
One of the key considerations is making sure the property is saleable and dealing properly with utilities while the property is awaiting a buyer.
It is also vital that a careful search of the property is undertaken to recover and preserve any valuables and/or important documentation. It is not unusual for people to store significant assets such as jewellery, or art at home and these items need to be identified and cared for. There may be documentation present which is vital for dealing with other assets such as share certificates or bank books.
Where applicable, the Title Deeds to the property need to be located. They are sometimes kept at home but more often will be in storage with a bank or Solicitors. Where there is a mortgage, then they will be stored by the lender and need to be requested by the Conveyancers. Rarely these days the property will not be registered at the Land Registry, but for unregistered titles finding documents to prove the ownership and extent of the property is crucial
Executors selling the property have to balance their duty to get a fair price for the house and the needs of beneficiaries against possible delay. If the house is sold at an undervalue, then Executors can be held to account. A Probate valuation of the property will be required from a local estate agent or a RIC‘s Redbook Surveyor, who should be asked to value the house at the time of death. HMRC may require that there are three valuations to ensure a consistent and reliable valuation for the purposes of calculating any Inheritance Tax payable.
The Executors or Administrators have the legal power to sell the property, which of course can cause conflict with family members who may be opposed to the sale. This is why it is essential to deal with issues affecting property quickly and efficiently and to seek legal advice where needed.