When Joanne's father passed away last spring, she found herself overwhelmed with more than just grief. The family home in Toronto needed immediate attention. The roof was leaking, property taxes were piling up, and the mortgage payments weren't stopping.
As the appointed executor, Joanne faced a common dilemma: "Can we sell the house before probate is complete?"
Joanne's story isn't unique. Across Canada, thousands of families face similar situations where selling an inherited property quickly becomes essential, but the probate process seems to stand in the way. The good news? There are options available, though they require careful planning and understanding of the legal requirements.
You can market and accept an offer on a property before probate is granted, but you cannot legally transfer ownership or complete the sale until probate is finalized.
Understanding Probate in Canada
What Is Probate?
Probate is the court process that validates a deceased person's will and grants the executor legal authority to manage and distribute the estate. In Ontario, this process confirms the will's authenticity, settles debts and taxes, and resolves disputes among beneficiaries.
How Long Does Probate Take?
Probate in Ontario typically takes 8-12 months, though this can vary significantly based on:
- Complexity of the estate
- Court location and current caseload
- Completeness and accuracy of documentation
- Whether there are disputes among beneficiaries
What does Probate Cost?
Estate Administration Tax (EAT) in Ontario is approximately 1.5% of the estate's value, with some key points:
- No tax on the first $50,000 of estate value
- $5 per $1,000 (0.5%) on amounts between $50,000 and $150,000
- $15 per $1,000 (1.5%) on amounts over $150,000
Your Options for Selling Before Probate
Option 1: List and Market with Extended Closing
This is the most common approach. Here's how it works:
The Process:
- List the property with a clear disclosure that probate is required
- Accept offers with closing dates 3-4 months in the future
- Include probate clauses allowing for closing date extensions
- Complete the sale once probate is granted
Key Contract Clause: A standard clause often used acknowledges that probate is required to sell the property and that the seller can extend the closing date upon written notice to allow for receipt of the probate.
Option 2: Limited Grant of Probate
A limited grant of probate is a relatively new system set up to deal with real estate when a person dies. The grant is limited in that it only allows for the sale of the home. This can expedite the process specifically for real estate transactions. This is done by a specific court order that recognizes potential hardship and grants a limited exception to sell a property before a full probate is complete.
Option 3: Exceptions to Probate Requirements
In rare cases, probate may not be required:
Small Estate Exception:If the estate is valued at less than $50,000, probate fees and EAT don't apply
First Dealings Exemption:This is potentially applicable if the property is the first transaction on the title since it was initially registered. However, this exception is uncommon.
Probate TImeline in Ontario
Probate times can vary greatly, depending on the estate, the courts and unforeseen complications.
Critical Legal Requirements and Risks
What You Must Have Before Listing the Property
- Legal authority as executor (are you named as the executor in the will?)
- Death certificate
- Copy of the will
- Proper legal disclosure to all parties
Risks of Proceeding Without Proper Precautions
There are certain risks involved with a house being sold before probate. The legal heirs may come with a will to the courts for probate, and while the grant is under process, the sale goes through.
Potential Issues:
- Deal termination if probate is delayed beyond extended closing dates
- Legal liability for executors who don't follow proper procedures
- Price fluctuations during extended waiting periods
- Buyer withdrawal due to uncertainty or financing issues
Protecting All Parties
For Sellers (Executors):
- Work with experienced estate lawyers
- Include proper probate clauses in agreements
- Maintain transparent communication with buyers
- Consider professional home buying companies for flexibility
For Buyers:
- Understand the risks and timeline
- Ensure financing can accommodate extended closing dates
- Work with lawyers experienced in estate sales
- Consider title insurance for added protection
Provincial Variations
While this article focuses primarily on Ontario, requirements vary across Canada:
Ontario: Standard probate required for most estate sales
British Columbia: Similar requirements with provincial variations
Alberta: Controlled exceptions exist, including Affidavit of Heirship for real property transfers
Quebec: Different process with notarial wills potentially avoiding probate
Frequently Asked Questions (FAQ)
Can I start the probate process and list the house at the same time?
Yes, you can. Having an Agreement of Purchase and Sale in place can help speed up the probate process, but your buyers need to agree and understand there may be delays. The legal process for probate usually gets prioritized for properties that are being sold.
What happens if probate takes longer than expected?
Include extension clauses in your purchase agreement. The agreement should address what happens if probate is still not available by the extended closing date, as failing to have an extension clause can result in the deal terminating.
Do I need probate if the house was owned jointly?
Usually not. If a house was owned 'in joint tenancy with a right of survivorship' and the surviving spouse was the designated beneficiary, the surviving joint tenant simply becomes the sole owner of the property.
Can I use estate money to maintain the property while waiting for probate?
Yes, but document everything. As executor, you have a duty to preserve estate assets, which includes maintaining the property. Keep detailed records of all expenses for estate accounting.
What if there's a mortgage on the property?
Continue making payments to avoid default. The estate is responsible for mortgage payments until the property is sold. Some lenders may provide temporary relief options for estates.
How much should I price the property knowing there will be delays?
Price competitively for current market conditions. Don't discount for probate delays—instead, find buyers willing to wait for the right property. Professional appraisal can help establish fair market value.
What if beneficiaries disagree about selling?
Resolve disputes before listing. All legal heirs may not be on the same page about the estate sale, and the person trying to sell may not have the right to sign the deal if there are unresolved disputes.
Can I make improvements to the property before probate?
Generally yes, for necessary maintenance and preservation. However, major renovations should typically wait until after probate unless they're essential for property preservation or sale.
What documents do buyers need to see?
Provide transparency with: Death certificate, copy of will naming you as executor, disclosure of probate status, and clear timeline expectations. Work with your lawyer to determine what can be shared legally.
The Bottom Line
Selling a property before probate is granted is not only possible but often the practical solution for families facing financial pressures or market timing considerations. The key is proper planning, transparent communication, and working with experienced professionals who understand estate law and real estate transactions.
Remember Joanne from our opening story? By working with an experienced estate lawyer and real estate agent, including proper probate clauses, and maintaining open communication with buyers, she successfully sold her father's house while probate was in progress. The sale closed two weeks after probate was granted, providing the funds needed to settle the estate and support her family during a difficult time.
Ready to explore your options? At Deeded, we specialize in helping Canadian families navigate complex estate sale situations. Our team understands the unique challenges of selling inherited property and can guide you through the process with expertise and compassion.
This article is for informational purposes only and does not constitute legal advice. Always consult with qualified legal and real estate professionals for guidance specific to your situation.
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