SELLING A DECEASED RELATIVE'S REAL ESTATE
What happens when a home is left to a child or other relative of a deceased parent or uncle or aunt or grandparent? Who owns the house? Can the house be sold? Can the relative use it as their own?
WHAT TO CONSIDER - LEGAL CAPACITYThese issues are always present. The primary part of the issue that most people do not understand is the issue of ownership. When an owner dies and there is a Last Will and Testament, just being named as the successor heir to the house does not transfer the title to the house. If the house is to be sold - who sells it? More specifically, who has the "legal capacity and authority" to sell the house?
LEGAL CAPACITY TO SELL#1 - You need someone legally authorized to sell a house and sign the deed of transfer to the buyer. Unless the house was in a trust and the trustee is alive, or the ownership of the house was in joint tenants or a life estate and there is a surviving joint tenant or remainderman, the estate of the decedent will have to be probated. The probate (also known as the administration of the estate) usually requires an attorney. In Florida the estate would need to go through formal or summary proceedings. Most legal proceedings should only cost a few thousand dollars. Without getting the property into a living person's name could result in problems down the road. It will have to be done eventually - no exceptions! The sooner the better.
LEGAL CAPACITY TO LIST#2 - Even to take a listing by a Realtor the listing has to be signed by a person authorized to sell the house. An heir is not an authorized person until the court has signed a Court Order making someone the owner or authorized person (this later person is usually the Executor or Personal Representative of the Estate). If an heir is signing a listing agreement it should be qualified (disclosed) that the authority of the person is subject to the court proceeding.
WHAT ABOUT THE MORTGAGE?#3 - If there are ongoing expenses for the house, like a mortgage, taxes, association fees, service providers like lawn care, etc. - these all need to be serviced. Mortgages can be a problem. Upon transfer to the heir, the clause in most mortgages about prohibiting transfers could be activated as a "due on sale". The borrower, being deceased, is a trigger to the due on sale of the promissory note as well. If an heir is keeping the property they need to consider refinancing it to pay off the decedent's mortgage.