Step 17 - Value the Home & Arrange for Rent or Sale
Last updated: November 2018
Why is this important?
This step explains everything you need to know about the various types of real estate ownership and valuation. Once you understand this Step, you will be able to make important decisions surrounding the real estate and if it will be transferred, kept, rented out or sold during the administration process.
Approximate Effort & Cost
Reading: 20 mins
Completing: 1-3 hrs
Total: 1:20-3:20 hrs
Cost: $0 – $1,000
Effort and cost are general estimates only and are based on the assumption that you complete this step without specialist help.
You and the Beneficiaries will need to decide how the real estate assets will be dealt with depending on the ownership and the Will. Specifically, you will need to:
- determine ownership of the real estate;
- check if the Will mentions how the real estate are to be distributed;
- agree how the real estate will be distributed;
- determine if any maintenance is needed to get a higher valuation;
- decide if the real estates are to be sold and the cash proceeds distributed;
- decide if the real estates are to be leased; and
- update the simplyEstate Assets & Liabilities Inventory.
17.2 Types of Ownership
17.2.1 Sole Ownership
If the deceased person was the sole owner of the home or other real estate, then those properties will generally fall within the estate and will be distributed as outlined in the Will or based on legislation in your State/Territory.
17.2.2 Joint Tenants
If the deceased person owned the home or other real estate with another person jointly, then those properties will in most cases not form part of the deceased estate as they transfer to the surviving joint tenant. Further instructions may be noted in the Will.
Where both joint tenants have passed, those properties will generally fall within the estate.
Refer to Step 30.4.3 – Transfer Real Estate to find out how to transfer a real estate to the surviving joint tenant.
17.2.3 Tenants in Common
If the deceased person owned the home or other real estate with another person in common, then the portion owned by the deceased person generally falls within the estate and will be distributed as outlined in the Will or based on legislation.
17.2.4 Mortgaged Property
If the home or other real estate owned by the deceased is still mortgaged at the time of death, then the mortgage for a property will also transfer to the Beneficiaries with the property.
The mortgaging bank will in most instances have the right to expect all moneys owed. This means that if the property is sold and cannot cover the outstanding mortgage, then other assets need to be sold to repay the mortgage in full. (see Step 14.5 – What are Creditors)
The deceased may have Mortgage Protection Insurance in place that covers the mortgage payments in the case the insured dies. (see Step 25 – Claim Insurance & Other Benefits)
17.3 The Will (if Available)
The Will may contain specific details and instructions on the distribution of the home and other real estate. The requests in the Will should be upheld to the extent that the law permits.
17.4 Value the Real Estate
As with all assets and liabilities of the estate, you will need to get a good understanding of the property value for the purposes of tax, Grant of Probate application and final distribution. A general rule is to either get a valuation by an independent specialist for a fee, or three valuations by different real estate agents to give you an average valuation.
Note: the value of all assets and liabilities are as at the date of death.
17.5 Let the Real Estate
It may seem a good idea to rent out real estate of the deceased estate to generate income during the administration process. However, based on legislation the Executors or Administrators can only enter into rental agreements upon receipt of a Grant of Probate or Letters of Administration (see Step 27 – Apply for Grant of Probate or Letters of Administration).
If real estate belonging to the estate is already rented out to tenants, the lease agreement continues between the tenant and the Executors or Administrators.
Should you need to terminate the current lease agreement you will need to provide notice in the appropriate period as outlined per the lease agreement.
Should a lease agreement come to an end during the estate administration process and the tenant requests their bond to be returned, you or the letting agent need to contact the relevant Authority in your State as follows:
Consumer Protection – Department of Mines, Industry Regulation and Safety
Phone: 1300 853 829
Opening Hours: Monday – Friday, 8:30am – 4:30pm AWST
Address: Level 2 (Reception), 140 William Street (please use the public entrance off Railway Lane from the Murray Street Mall), Perth, WA
Email: [email protected]
Post: Bond Administrator, Locked Bag 14, Cloisters Square WA 6850
- a copy of the Death Certificate;
- a copy of the Will; and
- a copy of the Executor’s proof of identity;
- a copy of the Grant of Probate or Letters of Administration (see Step 27 – Apply for Grant of Probate or Letters of Administration); and
- a copy of the Executor’s proof of identity.
The Consumer Protection – Department of Mines, Industry Regulation and Safety
website can be accessed here.
Fair Trading NSW
- Claim for Refund of Bond Money Form;
- Copy of the Death Certificate;
- Copy of the Will stating the Executor or Administrator; and
- Identification for Executor or Administrator nominated in the Will.
The Fair Trading NSW website can be accessed here.
Residential Tenancies Bond Authority (RTBA)
- Bond Claim Form, which you need to generate through the online RTBA Online tool, signed by the tenant(s) and Executors or Administrators;
- Death Certificate;
- Statutory Declaration from the Executors or Administrators; and
- Identification for Executor or Administrator nominated in the Will.
The Residential Tenancies Bond Authority (RTBA) website can be accessed here.
Residential Tenancies Authority (RTA)Phone: 1300 366 311 Opening Hours: Monday – Friday, 8.30am – 5:00pm AEST Lodge online: You can lodge here Email: [email protected] Post: RTA, GPO Box 390, Brisbane QLD 4001 Relevant Documents
- a Death Certificate; or
- an Interim Death Certificate; and one of the following:
- a copy of the Grant of Probate or Letters of Administration (see Step 27 – Apply for Grant of Probate or Letters of Administration); or
- original Statutory declaration.
17.6 Sell the Real Estate
It is not uncommon that the Executor or Administrator either require to or wish to initiate the sale of real estate during the administration process. It needs to be noted that final transfer of title and land can only occur once a Grant of Probate or Letters of Administration are obtained from the Supreme Court (see Step 27 – Apply for Grant of Probate or Letters of Administration).
While the estate administration is in progress, you as the Executor or Administrator can put the property on the market and enter into a contract for sale contract so long as –
- the Executors or Administrators are listed as the vendors; and
- special conditions are added to clarify that:
– the buyer is aware of the property being sold by Executors or Administrators;
– the sale is conditional on the Grant of Probate or Letters of Administration being granted by a specific date (note Grant of Probate applications can take multiple weeks or months depending on complexity); and
– the settlement of the property will take place within a specific period after Grant of Probate or Letters of Administration being granted.
If the Grant of Probate or Letters of Administration are not obtained within the specific time frames, the buyer has the right to exit from the contract.
Refer to Step 30.4.3 Transfer Real Estate for detailed instructions on how to transfer real estate to the estate for sale.
17.7 Actions and Decisions to Complete Step
If you would like a little help from us at simplyEstate with this Step, you can email us or book your free first phone appointment. If you would like specialist help, get in touch with one of our Specialist Partners listed in the yellow section to the right or below and see how they can help.
If you have decided to tackle this Step yourself after reading and understanding this Step, you may want to:
- Determine the ownership of all real estate;
- Check the Will (if available) about any specific instructions about how the real estate is to be distributed;
- Value the real estate;
- Negotiate deferral or pay all mortgage payments for real estate that is mortgaged;
- Decide if the owned real estate will be kept vacant, rented out or sold;
- Return a rental bond if a real estate was rented out and the lease ended; and
- Update the simplyEstate Assets & Liabilities Inventory with all real estate and their value.
Once you have completed all the necessary actions and decisions, you can move on to the next Step by clicking below or save progress at the top.
Do you need specialist help?
simplyEstate has partnered with select Specialists across Australia to assist you.
You can click on your State/Territory to find a suitable Specialist and get in touch to discuss how they can help you.
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