Heidi Start, Solicitor in Coodes’ Residential Property team, outlines the main steps executors should consider when selling a property.
Executors named in a Will have a number of duties as they wind up the deceased person’s estate. If the deceased person’s estate includes property the executors may need to sell the property unless the beneficiaries wish to have it transferred into their names.
Here are the key steps executors should consider when selling a property.
1. Ensuring the sale is in the beneficiaries’ best interests
The executors have a duty to act in the best interests of the beneficiaries.
As probate properties are often chain free and may present an opportunity for renovation, they are generally seen as a good investment. However, an executor should not be tempted to sell a property for less than market value to obtain a quick sale. If the property is sold for less than the reasonable market value the beneficiaries could take action against the executors.
Throughout the process, executors should talk to their lawyer and take advice to ensure everything they do in relation to the property sale is in the beneficiaries’ best interests. Our expert team here at Coodes can help executors throughout the selling process.
2. Securing the grant of probate
Executors need to obtain a grant of probate to sell or transfer a property held in the deceased’s sole name. This is a legal document issued by the court that confirms the executors’ authority to deal with the estate. Coodes has a specialist probate team to guide your through the procedure needed to obtain the grant of probate.
There is nothing to prevent the executors from putting the property on the market before the grant is obtained. However, contracts cannot usually be exchanged until the grant is received. If the property is marketed before the executors obtain the grant of probate, it is important for all parties involved in the conveyancing transaction to be aware that the property forms part of a deceased estate and that a grant is needed.
Even for a simple estate without any inheritance tax liability it can take many months to obtain the grant of probate.
3. Confirming the value of the property
The executors will either need to obtain two or three valuations of the property from estate agents or a formal surveyor’s valuation, depending upon the nature and circumstances of the estate. It is extremely important that an accurate valuation is obtained and there are certain issues which a valuer must be asked to consider. If you would like any help or advice with this, the probate team at Coodes would be happy to help.
4. Obtaining the property deeds
To sell the property, the executors will need to locate the paper title deeds if the property is not registered. The deeds may be among the deceased’s papers or held in safe custody by their bank or solicitor. If the property is registered, a copy of the title entries and plan can be obtained from the Land Registry. These documents enable the executors to check the title to the property and show the full extent of the property to be sold or transferred.
5. Checking any restrictions on the property
Executors should consider instructing a lawyer to check the documents relating to a property. This will help uncover any restrictions affecting the property or defects with the title. Enlisting the help of a lawyer at an early stage means any issues can be addressed before the property is put on the market. This prevents delays later in the conveyancing process.
If the sale involves a complex unregistered title, the lawyer acting for the potential buyer may require the executors to complete an application for first registration before the matter proceeds.
6. Insuring the property
If the property is empty, the executors must ensure that there is suitable insurance cover in place for the property. The executors should contact the insurance provider and advise them of the deceased’s death and the fact that the property is vacant. It is important that the executors comply with any conditions attached to the policy.
7. Clearing and distributing the contents
Executors are responsible for sorting through the possessions held in the deceased person’s property and dealing with them in accordance with the deceased’s Will. The probate team here at Coodes advises executors on their duties in relation to the sale or distribution of personal items.
It is important not to underestimate the scale of this task and the time it will take – especially if the individual lived in the house for a long period of time. The executors are responsible for ensuring that the property is empty upon completion of the sale.
8. Dealing with the buyer’s solicitor
When the executors have accepted an offer on the property, they will need to deal with the buyer’s solicitor.
As an executor may never have lived at the property their knowledge of the deceased person’s home may be very limited. This should be reflected in the protocol forms completed at the beginning of the transaction and any answers to enquiries which a purchaser’s solicitor may raise.
An executor has a duty to find out as much information as possible about the property, but it is recognised that they might not know specific details. Prospective buyers will rely on the information provided so it is important to ensure any information given is correct. It is better that the executor declines to comment rather than providing incorrect information about the property.
9. Getting advice on capital gains tax
Executors will need to consider the capital gains tax implications of any sale. The property may increase in value from the date of death until the date that a sale is agreed. If this is the case the executors may incur a Capital Gains Tax liability. The executors should take advice from a lawyer, who can advise them on taking steps to mitigate any tax payable. These steps must be taken prior to exchange of contracts. The probate team at Coodes regularly advises executors on the ways in which they could look to mitigate any Capital Gains Tax liability.
This outlines some of the steps executors should take when managing and selling a property. However, every estate is different and brings its own complex set of issues. It is important for executors and beneficiaries to maintain open and clear communications regarding the property sale and advisable for executors to get specialist legal advice right from the outset.
For more advice on selling a property please contact Heidi Start in the Residential Property team at Coodes Solicitors on 01637 870737 or email@example.com. For more advice on probate matters, please contact Sarah Cornish in the Wills, Probate and Trusts team on 01579 325793 or firstname.lastname@example.org.