Q: My mother died almost 10 years ago and since then my brother has lived in her home. Now he’s getting married and moving out of state. We listed the property for sale and got a good offer last month, which we accepted. We are supposed to close in a week and we’ve just found out we can’t sell the property because it is still in our mother’s name. Our Realtor and the buyers are frantic. How can we clear title so we can sell the house quickly?
A: This isn’t a terribly uncommon problem.
Often, when an elderly parent dies and has little in his or her estate except the family home, no one thinks to contact a lawyer. They just treat the house like it was theirs.
Now you’ve got a problem, but it is fixable.
Unfortunately, this is a problem you should have discovered shortly after you accepted the buyer’s offer.
When you accepted the offer your agent undoubtedly opened escrow with a local title company. At that time a preliminary title report, or “prelim” as it’s called in the business, would have been generated.
Had you and your agent gone through the prelim you should have seen the problem at the beginning, rather than at the end of the escrow.
In fact, your agent probably shouldn’t have taken the listing without at least checking to see who owned the house since, technically, you and your brother don’t have the authority to sell it.
Had the problem been caught before there was a contract, there would have been more time to deal with it.
Now that it’s happened, you have a secondary problem in that you have contracted to sell something you don’t own. Much like selling the proverbial Brooklyn Bridge.
Unless you negotiate something to the contrary, you will be in breach of your sales contract when the date for closing comes and goes. The buyer will be able to sue you for any monetary damages they have suffered as a result of your inability to deliver title to the property.
So start negotiating something, quick. Perhaps you could strike a deal to allow the buyers to rent the property until title is cleared?
In the meantime, unless your mother had a living trust, and the home was actually in the trust, you will have to open a probate.
Though a probate takes at least six months to conclude, and often much longer, you may be able to get authority from the court to conclude your sale much faster than that, with the provision that some or all of the proceeds be held in a blocked account until the probate is closed. This assures the court that if any creditors of your mom’s crop up there will be money with which to pay them.
The court will grant your request to close escrow provided all of the heirs of your mom’s estate can be contacted and will consent to the sale.
Assuming your mother died without a will, the heirs will be her children. So if all of your brothers and sisters agree, and execute the proper paperwork, you’ll be able to sell the property in, hopefully, about four weeks.
You need to get in touch with a probate lawyer immediately so you can start the process of getting court authorization to complete the sale.
Tim Jones is a real estate attorney in Fairfield. If you have any questions you would like to have answered in this column you can contact him at [email protected]