What is a property sold subject to Probate or Administration?
Buying a property subject to Probate or Administration is when a property is listed for sale and sold without the Executor or Administrator yet being registered on the certificate of title. The deceased remains on title until such time the Court grants Probate or Letters of Administration. Once the Executor or Administrator is appointed, they can then be registered on the certificate of title and proceed with the settlement process. This means that you can begin the process of selling a deceased’s house, whilst the process of Probate and Administration is being fianlised.
When purchasing a property subject to Probate or Letter of Administration the completion date is unknown. A Special Condition is added to the Contract stating the completion date will take place by a certain time after the Executor or Administrator is the registered owner. There is normally a sunset special condition as well. This condition allows the Executor or Administrator to rescind from the Contract if Probate or Letters of Administration is not granted within a certain time frame.
A purchaser should be aware that if the sunset date exceeds three (3) months from the date of the Contract, then stamp duty will be payable. If Stamp Duty is not paid with the prescribed time frame, penalty interest will be payable. Stamp duty will be refunded if the Contract is rescinded.
What is Probate?
Probate is the process of proving and registering with the Supreme Court the last Will of a deceased person. The Executor of their Will administrates the estate and handles the disposal of their assets and debts.
What is Letters of Administration?
Letters of Administration is when the deceased dies without the making of a Will. The Court will grant consent to an administrator such as a family member or friend to manage the distribution of the deceases estate.
Written By Megan Johnson.