Selling a House in an Estate in BC: The Executor's Process

When the family home is the biggest asset in an estate, selling it is often the executor's largest job. In BC a buyer cannot take title straight from the deceased: title first has to move to you, as personal representative.

This guide walks through the order of steps, the rules that commonly catch executors off guard, and the practical issues, from an empty house to family members still living there and tax, that shape when and how to sell.

Where your authority to sell comes from

Under section 142 of the Wills, Estates and Succession Act (WESA), a personal representative, meaning the executor named in a will or an administrator appointed by the court, has the same authority over the estate as the deceased had. That authority has to be used in the best interests of the beneficiaries, and the will can shape it.

• The will directs a sale. Many wills tell the executor to sell and divide the proceeds, or give a broad power of sale. Follow the wording.
• The will leaves the house to someone. Your job is usually to transfer it to that person, not sell it. If the estate needs cash to pay debts, take advice before you decide to sell instead.
• There is no will. An administrator's authority comes from the court's grant, and the court can attach conditions. The Province's explanation of WESA gives one example: an administrator may have to get court approval before selling the deceased's house.

Beneficiaries will judge your decision, so build a record: an independent appraisal, listing at market, written updates and copies of every offer. Selling to yourself, or to one beneficiary below market, is where disputes start. Get advice before agreeing to it.

The order of steps, from grant to completion

• Secure and insure the house. Keep utilities on, check the locks and tell the insurer the owner has died. Many home policies limit coverage when a house sits empty, so ask about vacancy conditions.
• Get the grant. If the house was in the deceased's name alone, a buyer cannot get title until a grant of probate or administration has issued. A house held in joint tenancy passes to the surviving joint owner instead. Our guide to whether you need probate in BC explains the difference.
• Register the transmission. Before dealing with the land, you must apply to the Land Title Office to be registered as owner in your capacity as personal representative. The application uses a Form 17 with a court-certified copy of the grant. A property transfer tax return is filed, but a transfer to a personal representative of property that is part of the deceased's estate is exempt.
• List, sell and complete. You sign the listing and the contract as executor, and the lawyer or notary handling the conveyance deals with the Land Title Office requirements described below.
• Hold the proceeds. The sale money goes into the estate account and pays debts, taxes and expenses before anything is distributed. Our executor duties guide sets out the wider sequence.

Grant timing is outside your control. If you are thinking about listing before the grant issues, have the contract terms reviewed first.

Two timing rules that catch executors out

The spousal home when there is no will

If the deceased left no will, or a will that does not deal with the home, WESA sections 26 to 28 give a surviving spouse special rights. The spouse can require that the spousal home go toward their share of the estate, and you must tell them about that right. They generally have 180 days from the grant to decide, which the court can extend. During those 180 days you must not sell or otherwise dispose of the spousal home without the spouse's written consent, except in narrow circumstances. If you are the administrator and not the spouse, get that consent in writing before you agree to sell within that period.

The 210-day rule covers distributions, not every sale

WESA generally prevents distributing an estate within 210 days of the grant without the required consents or a court order. Transferring the house to a beneficiary is a distribution. A sale to an outside buyer is not, though paying the sale proceeds out to beneficiaries early would be. The Land Title Office uses standard declarations to confirm which kind of transfer it is. Our guide to the 210-day rule explains the consents. If the house goes to a related beneficiary instead, see our note on property transfer tax exemptions for family transfers.

When family members live in the house

An adult child, sibling or surviving partner is often still living in the house. As executor you hold it for all the beneficiaries, so put the arrangement in writing: who pays utilities, insurance and property tax, whether rent is paid, and when the house must be vacant for showings and completion.

Where the spousal home rules apply, the spouse is responsible for the home's expenses while deciding whether to take it, and in some intestate estates a spouse can ask the court to let them keep living there. If one beneficiary wants to buy out the others, get an independent appraisal and put the terms in writing. If someone will not leave, or the beneficiaries cannot agree whether to sell, get advice early.

Vacancy taxes on an empty house

• Speculation and vacancy tax. Where the tax applies, owners on title at the time of death are exempt for the year of death and the following calendar year, and so is the person managing the estate. Only the executor or personal representative can make the annual declaration for the deceased, due by March 31.
• Vancouver's Empty Homes Tax. The City requires a property status declaration every year. There is an exemption where the home was unoccupied for more than six months because the registered owner died, in that reference period or the following one.

If a sale drags on, those exemptions can run out. Keep the declarations current either way.

Income tax: the deceased's return and the estate's

For income tax, a person is generally treated as having disposed of their capital property immediately before death. If the house was the deceased's principal residence, the executor can claim the principal residence exemption for them; the CRA uses Form T1255 for a legal representative's designation.

Income the estate earns after the date of death is reported on the estate's T3 return. That can include a gain if the house rises in value before it sells, and the principal residence exemption may not cover that period, so get a date-of-death appraisal and speak to an accountant about timing. Before distributing, ask the CRA for a clearance certificate. Without one, you can be personally liable for the deceased's unpaid tax up to the value of what you distribute.

Selling a house in an estate? Get the order of steps right first

Our probate and estate lawyers can help you apply for the grant, register the transmission, work through the spousal home and 210-day requirements, and coordinate the sale with your realtor and the buyer's lawyer.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.