Selling an Estate House in BC: Mistakes That Delay the Sale or Expose the Executor

Selling the family home is often the largest single step in administering a BC estate, and it is where executors most need the order of steps to be right.

This article covers eight mistakes that can hold up a sale, upset beneficiaries or leave the executor personally exposed, with the rule behind each and how to avoid it.

Our guide to selling a house in an estate sets out the process from grant to completion. This article looks at the same sale from the other side: where it tends to go wrong.

1. Assuming the house is part of the estate

The rule. On death, land vests in the personal representative unless there is a right to it by survivorship (WESA s 162(1)). A house held in joint tenancy passes to the surviving owner, not to the estate.

The risk. An executor who lists a jointly held house has nothing to sell, and the time and cost of the listing are wasted.

The fix. Start with a title search and check how the house was held. Our article on transferring the house after a joint owner dies covers that route.

2. Selling a house the will gives to someone

The rule. Your authority over the estate is subject to any contrary intention in the will (WESA s 142(1)(a)), and a person beneficially entitled to land can generally require you to transfer it to them (s 162(2)(b)).

The risk. Selling a house that was left to a particular person can lead to a claim against you.

The fix. Read the will closely before listing. If the estate needs cash for debts, or the beneficiaries would rather sell, get advice and their written agreement first. See our article on transferring an estate house to a beneficiary.

3. Signing a sale contract before you can give title

The rule. Before an instrument dealing with the land can be registered, the person entitled must apply to be registered as owner (Land Title Act s 260(2)). For an estate, that transmission application relies on a court-certified copy of the grant of probate or administration (s 266).

The risk. A completion date set before the grant issues can leave you unable to complete on time, putting the deal at risk and exposing the estate to a claim from the buyer.

The fix. Wait for the grant, or have the contract reviewed so that completion allows for the grant and the transmission. Grant timing is outside your control; our guide to how long probate takes explains the stages.

4. One co-executor signing alone

The rule. Where there are several personal representatives, a disposition of land by only one or some of them is not valid without the court’s approval, subject to narrow exceptions such as where another executor’s right to apply for probate was reserved (WESA s 162(4)).

The risk. A sale signed by one of two acting executors may not be able to complete.

The fix. Make sure every acting executor signs the listing, the contract and the transfer, and build in time for an executor who lives elsewhere. Our article on co-executors explains how joint executors work together, and online probate in BC covers what can be done from a distance.

5. Selling to yourself or a relative below market

The rule. You hold the land as trustee for the people beneficially entitled to it (WESA s 162(2)(a)), so the sale must serve them, not you.

The risk. A sale to yourself, a relative or one beneficiary at a discount invites a challenge from the others and can support an application to remove you (s 158).

The fix. Get an independent appraisal, expose the house to the market, and obtain the informed written consent of all beneficiaries, or the court’s direction (Trustee Act s 86), before agreeing to an inside sale. If a family member wants to keep the home, see buying out a sibling’s share.

6. Selling the spousal home without the spouse’s consent

The rule. Where there is no will, or the will does not deal with the spousal home, the surviving spouse may acquire it toward their share (WESA s 26). For 180 days after the grant, or any extension, you must not dispose of it without the spouse’s written consent, unless the other assets cannot pay the debts and a mortgage on the home would not raise enough (s 28).

The risk. A sale in that window without consent breaches the Act.

The fix. Get the spouse’s written consent before you list, or wait until the period ends. Our article on spousal home rights explains the rules.

7. Paying out the sale proceeds too soon

The rule. Selling to an outside buyer is not a distribution, but paying the proceeds to beneficiaries is. WESA s 155 bars distribution within 210 days after the grant without the required consents or a court order. Separately, if you distribute without a CRA clearance certificate, you are personally liable for unpaid tax up to the value distributed (Income Tax Act s 159(2)–(3)).

The risk. Tax on the house is easy to underestimate. The deceased is treated as disposing of it at death, and the CRA says a gain on a sale by the estate after death is generally the difference between the sale price and the value reported on the final return. The principal residence designation on the final return deals with the deceased’s gain; whether anything shelters the estate’s later gain depends on its circumstances.

The fix. Hold the proceeds in the estate account, speak with an accountant about the final and estate returns, and keep a holdback until clearance. See our articles on the 210-day rule and CRA clearance certificates.

8. Letting objections stall the sale, or ignoring them

The rule. WESA gives you the same authority over the estate as the deceased had, subject to the will and other law (s 142(1)), so beneficiaries’ approval is not usually a legal precondition to selling. The spousal home is one exception, and a will can add others.

The risk. Beneficiaries who object can still go to court, and a sale that looks rushed or below market is harder to defend.

The fix. Share the appraisal, listing plan and offers in writing. If there is a genuine deadlock, such as whether to sell at all, you can apply to the court for directions (Trustee Act s 86), and acting on them protects you on that point (s 87). Our article on sibling disputes over a parent’s estate covers options short of court.

Selling a house from an estate? Check the order of steps before you list

Our probate and estate lawyers can confirm how the house is held, apply for the grant, register the transmission, prepare spousal or beneficiary consents, 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.