If you are an executor tasked with selling a property in a deceased estate in South Australia, understanding some key concepts can empower you to take considered action with confidence. You should avoid rushing to sell before your legal ducks are in a row. Here are some essential things you need to know before you call your real estate agent to start the sales process.
Understanding forms of ownership: Joint Tenants vs Tenants in Common
First and foremost, determine the manner in which the deceased held the property – was it as ‘joint tenants’ or ‘tenants in common’?
- Joint Tenants: In this form of ownership, all owners have an equal interest in the property and own the whole together. Upon the death of one owner, the property automatically transitions to the surviving owner(s), sidestepping the Will and sometimes even the probate process.
- Tenants in Common: In this form of ownership, each owner possesses a distinct share in the property. For example, one half share each. When an owner passes away, their share does not automatically transfer to the other owners. Instead, it becomes part of the deceased’s estate and is distributed pursuant to the terms of their Will or, if they didn’t have a Will, according to the laws of intestacy.
Generally, but not always, married couples will own property as joint tenants. This means that upon the death of one spouse, the property is considered the property of the surviving spouse. In these cases, a Grant of Probate is not required by the Lands Titles Office to deal with the property. The death certificate and the relevant forms prepared and lodged by your conveyancer or solicitor will be sufficient to place the title into the name of the survivor.
Sometimes, couples may own a property as tenants in common. This can often be set up for asset protection or estate planning purposes, particularly if the couple has partnered later in life, each having accumulated their own assets and wanting to benefit their own children from their estates. In those cases, the Will of the deceased person will likely dictate what happens. For example, the Will may provide that the surviving spouse has a right to reside in the property, otherwise the property may have to be sold, or the deceased’s interest transferred to the beneficiaries. In any event, a Grant of Probate will be required to deal with a share owned by a tenant in common.
We will always ask you for a copy of the Certificate of Title, or will conduct our own search, to confirm the ownership of the property.
The Role of Probate
At the heart of dealing with property lies the all-important Grant of Probate. In non-legal speak, a Grant of Probate is the Supreme Court’s stamp of approval that the Will of the deceased person is valid and can be relied upon. Until the grant is received, technically, the property can’t be sold. Why? Because the ownership is still in limbo, and Land Services SA requires the court’s order proving that you can deal with the property.
Engaging a Real Estate Agent: To Wait or Not to Wait?
Given the unpredictability of the duration it takes to secure a Grant of Probate, many might wonder: should one wait before getting a real estate agent onboard to start the sales process?
If you engage an agent, enter into a sale contract, set a settlement date and only then consult a lawyer to obtain a Grant of Probate, you may have committed to a timeline that is not feasible. You may not have all the information ready for the application for probate, or issues with the Will or assets or family members might make the probate process more complicated and time-consuming. It may also require an urgent application to be made, which can increase the costs and place pressure on both you and your lawyer.
If you are itching to get the ball rolling, make sure you include a condition that the sale is subject to probate and preferably call your lawyer first. Making the contract subject to probate means that the sale will only be finalised once the probate is granted. It offers both the seller and buyer a layer of protection, ensuring there is no breach of contract due to unforeseen delays. In the spirit of being realistic, it’s advisable to choose a settlement date a few months down the line, as probate processing times can vary.
Consult a Lawyer First
Regardless of how you think the property was held or how simple you think the process will be, it is always a good idea to enquire initially with a lawyer before you sign on the dotted line. Make sure you get tailored advice specific to your circumstances and find out if you need a Grant of Probate to deal with a deceased estate property. You will potentially save yourself and the estate unnecessary stress and costs.
Are you an executor facing the challenges of a deceased estate in South Australia? Reach out to Eckermanns for advice. Call us on 8366 7900.