What does it mean when the house is being sold by an estate?
An estate sale is not a different kind of house. It is a different kind of seller, and the question that matters is whether the person signing has the authority yet.
The short answer
It means the owner has died and the person selling needs court authority to do it. In Ontario an estate trustee is the only person who can manage or distribute an estate, and a certificate should be obtained before anyone enters into an agreement of purchase and sale. Robin Patel, a REALTOR® in Brampton, checks that first.
Written forBuyers in the GTA who have found a house being sold by an estate rather than by an owner, and who were told the sale is subject to probate.
The short version
- In Ontario an estate trustee is the only person with the legal authority to manage or distribute an estate.
- Ontario states that where the deceased owned real property, the estate normally must be probated, though property passing by right of survivorship is treated differently.
- Ontario advises that a certificate should be obtained before anyone enters into an agreement of purchase and sale.
- Applications are typically processed within 15 business days, and can take longer where documents are incomplete or a judge must decide.
- There are two kinds of certificate depending on the value of the estate, and estate administration tax is paid as a deposit when the application is filed.
What an estate sale actually changes
An estate sale is not a category of property. The house is an ordinary house. What differs is who is on the other side of the agreement, because the registered owner has died and cannot sign anything, so somebody has to be given the authority to sign for them.
Ontario is explicit about who that is. An estate trustee is the only person with the legal authority to manage or distribute an estate. Until a person holds that authority, there is nobody on the seller side who can bind the property, however willing the family is.
An estate sale is not a category of property. The house is an ordinary house.
What probate is, and when a property needs it
Probate is the procedure for asking the court to give a person authority to act as estate trustee, to confirm the authority of a person named in a will, or to formally approve that a will is the valid last will. The document that comes out of a successful application is a Certificate of Appointment of Estate Trustee, which gives the holder authority to manage the estate assets and pay the estate debts.
It is not needed in every estate. Ontario states that probate is not always required, and that the type of assets usually determines whether an estate should be probated — but that where the deceased owned real property, or assets held by a financial institution, the estate normally must be probated. Property that passes to another person by right of survivorship is treated differently, which is why some houses change hands after a death without any of this.
| Question | What Ontario states |
|---|---|
| Who can sell | The estate trustee, the only person with legal authority to manage or distribute an estate |
| Is probate always needed | No. The type of assets usually determines it |
| What about real property | Where the deceased owned real property, the estate normally must be probated |
| When should the certificate be in hand | Before anyone enters into an agreement of purchase and sale |
| Which court | The Ontario Superior Court of Justice |
The timing a buyer actually feels
Ontario states that applications are typically processed within 15 business days, and that it may take longer where the documents filed are incomplete or where a judge has to make a decision. That is the processing step alone, and it begins only once an application has actually been filed, which is the part a buyer cannot see from the listing.
There is a tax step attached to the application as well. Estate administration tax is charged on the value of the estate where a certificate is applied for and issued, it is paid as a deposit when the application is made, and it is due on the day the certificate is issued. There are two kinds of certificate depending on the value of the estate, and the thresholds and the rate are published on the Ontario pages rather than restated here, because figures of that kind change.
What to ask before you write
Because Ontario advises that a certificate should be obtained before anyone enters into an agreement of purchase and sale, the first question is simply whether it exists yet. If it does, the authority question is settled and the sale proceeds like any other. If it does not, you are being asked to sign with someone whose authority has not been confirmed.
That is not automatically a reason to walk away, and estates are sold in Ontario every week. It is a reason to have your own lawyer look at the position before you commit, and Ontario itself notes that probate is time and labour intensive and that estates issues can be complicated.
Written by
Robin PatelSalesperson · The Agency Toronto
Updated
Published
Read in your language
A machine translation, not Robin’s words. For anything that decides money, ask him in Gujarati or Hindi directly.
