When you are administering an Estate, perhaps an Executor or Administrator, there will be certain responsibilities and tasks that come with this role which must be completed.  For the purposes of this article, we refer to Personal Representatives throughout as the umbrella terms for Executor (the person appointed to deal with an estate when someone has left a Will) and Administrator (where someone has died intestate).  These include collecting in all of the Deceased’s assets and distributing these as per the terms of their last Will or the rules of Intestacy.

The largest asset that often needs to be dealt with during an Estate administration is the home of the deceased person.  When a family member or loved one dies and they owned property, the responsibility for the Personal Representative to look after and manage the house starts as soon as they pass away.  As a Personal Representative, it will be your duty to make sure that the property is properly secure and safe, and that the property remains insured and is checked regularly.  If the property needs to be sold, then it falls to the Personal Representative to arrange for the marketing and final sale of the property.

It is usually a good idea to obtain three valuations from local estate agents – this will then give an indication of the current value of the property and its saleability.  It also gives the Personal Representative reassurance that the property is selling for the best, but also most realistic, price.  It may be that a full valuation is required and in this case, the Personal Representative will need to instruct a surveyor to undertake this report and valuation.  A Personal Representative has a continuing duty to ensure they are acting in the best interests of the beneficiaries, and this includes getting the best from the property.  However, the highest price might not always be the best option if the agent fees are too high, the marketing price unrealistic or a buyer is in a long chain where a quick sale is needed.

It is also important to bear in mind, particularly during an unpredictable property market, that the valuation for inheritance tax purposes, known as the probate valuation, must be the value of the property at the date of death rather than the value at the date of marketing or sale which might be a quite different value.

Although valuations can be obtained, decisions made relating to the sale price and who will deal with the marketing, contracts for the sale of a property and completion cannot take place legally until a Grant of Probate or Letters of Administration have been obtained.  This is an important factor to consider when selling a property as a Personal Representative as the processing of applying for and obtaining a Grant of Probate can take some time.  The Probate Registry may also take some months to process an application for a Grant into the bargain.  This does mean that there is an inevitable gap between someone dying and the Personal Representative being legally able to sell the house.  There have been cases where the delay in obtaining a Grant of Probate has resulted in the house sale falling through, in turn causing unnecessary concerns and stress, and potentially costs to the estate.  However, this does not mean that a property cannot be marketed without obtaining the Grant of Probate – it is a reminder though of the need to be open and honest with the estate agents and potential buyers that the sale is dependent on the Grant being issued.

At the same time as valuations are being obtained, it is essential that the Personal Representative take specialist advice on the potential exposure to Capital Gains Tax for the estate and any possible steps that can be taken to mitigate any potential tax bill.  We can assist with this but taking this advice at an earlier stage is crucial – it then allows time for the property to be appropriated (transferred) to the beneficiaries of an estate before the property is sold if this is the most tax-effective way to proceed.

Once a buyer has been found for the property, the Personal Representative will sell the property on behalf of the deceased person’s estate unless the property has been appropriated to the beneficiaries already and they move forward with the sale themselves.  As such, it is likely that the Personal Representative will be responsible for answering any questions that the buyers or conveyancing solicitors may have – they would need to put together the usual information about a property just as a normal seller would do.  It is important that any answers to these questions are accurate, and should the Personal Representative not be sure of the answer to a question, they should discuss this with their solicitor acting in the sale to ensure that any answers given do not open them up to any liability to the buyer.

Upon completion of the sale of the property, the sale proceeds will need to be paid into an account set up in the name of the Personal Representative that has been opened with the sole purpose of dealing with the assets of the deceased person.  This is often known as an Executor’s account and it is usually a new account that the Personal Representatives open with the Bank.  However, some Banks will sometimes rename a deceased customer’s account as an Executor’s account – this is much easier and quicker so well worth an ask.

If no Executor’s account is opened during the estate administration process, this can pose real difficulties – especially if this account has not been arranged prior to the sale of the property.  The Executor’s account needs to be open to allow solicitors to pay the funds over into this account – we cannot pay it to beneficiaries or the Personal Representatives themselves in any personal capacity and neither can we hold the funds here without acting in the wider estate administration once completion has occurred.  As a result, we would advise all clients to discuss this with us at the very outset of the sale process to ensure there is no hold-up for the sale.

One alternative solution however is if a law firm is instructed to assist in the Administration of the Estate, the sale proceeds can be paid to the firm’s client account to be held on the administration matter.  The funds can then be paid out as part of the estate administration process as part of interim distributions or once Estate Accounts have been prepared and approved and a final distribution can take place.

The above is an overview of the key things to remember when selling a property as a Personal Representative.  Other things to remember or be aware of are whether the property is registered or unregistered, agreeing and arranging the clearance of the property and taking final meter readings to provide to utility companies to ensure the estate is not charged for unnecessary usage.

This article was prepared by Sarah Witheridge, a Partner and Head of Property Law at WBW Solicitors in Exeter. Should you have a Property matter that you wish to discuss with Sarah, please contact her by telephone on 01392 260108 or email at sarahwitheridge@wbw.co.uk.

WBW Solicitors has offices in Axminster, Bovey Tracey, Brixham, Chard, Exeter, Exmouth, Honiton, Launceston, Newton Abbot, Paignton, Seaton, Sidmouth, and Torquay.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.