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Can a Beneficiary Prevent The Sale Of a Property? (NSW)

An executor of a will may have to arrange the sale of a property from the deceased estate. An executor must obtain probate to sell real property, but once they have this legal authority, there have broad powers to make decisions about the asset. This article explains how an executor can sell real property and the limited circumstances when a beneficiary can prevent the sale of real property in New South Wales

Real Property Within Deceased Estate

There are two categories of real property that the executor may have to sell as part of the administration of a deceased estate.

The first category of real property in a deceased estate is any asset not explicitly gifted to a beneficiary in a will. Typically, the testator will leave instructions for these assets to be sold. The executor will use the proceeds to satisfy debts, pay funeral expenses, and give the residual to specific beneficiaries. In that case, the executor is following the terms of the will by arranging the sale of the property.

The second type of real property that an executor may need to sell is any property that the testator has bequeathed outright to a given beneficiary in their will. An executor must distribute gifts as specified in the will. However, sometimes an executor needs to sell a designated property to pay the estate’s debts. In that case, the executor must attempt to honour the bequest’s value in either cash or alternative property from the estate.

The Sale Of Property From A Deceased Estate

In some ways, selling a property from a deceased estate is like any other sale of real property. However, there are some differences that an executor needs to be aware of when preparing to sell this kind of property. An executor must follow specific steps to arrange the sale of a property.

An executor must:

  1. Apply for a grant of probate, as the executor cannot sell a property without first securing a probate grant;
  2. Transfer the property deed into the name of the executor, giving them the legal right to transfer the property after the sale;
  3. Obtain a professional property valuation, which is particularly vital if the property is not going to auction;
  4. Check the property to see if there are any necessary repairs to make it more saleable;
  5. Consult several real estate agents in the local area to determine which agent and method of sale will deliver the best outcome for the estate (balancing price and speed of sale);
  6. Decide on a selling strategy, whether that means that the property is sold at auction or private treaty;
  7. Sign an agency agreement with a real estate agent;
  8. Provide the necessary paperwork to complete the sale; and
  9. Distribute the residual proceeds of the sale to the rightful beneficiaries.

A beneficiary cannot stop the sale of a property from a deceased estate if the executor follows these steps. The executor has control of the deceased estate and can make any decision that benefits the estate and the beneficiaries of the will. However, the executor needs to be aware that selling a family home may be an emotional process for family members of the deceased. A beneficiary may want to stop the sale of a property that has sentimental value to the family.

When Can A Beneficiary Stop The Sale Of A Property?

The executor has a legal duty to sell the property at (or above) market value. A beneficiary who feels that an executor is permitting the sale of a property below market value can hold the executor personally responsible. To avoid conflict, the executor must ensure that they conduct the sale of a property transparently. An executor must keep detailed accounts of every transaction. They should also communicate regularly with all of the beneficiaries during the sale of the property.

A beneficiary can obtain a court order to stop the undervalue sale of a property. For instance, the Supreme Court of NSW can overrule the executor’s authority and halt the sale of any asset of the deceased estate. The court can compel the executor to produce documentation on their administration of the estate and order them to refrain from certain actions. In serious cases, the court can order the removal of the executor for misconduct.

Arranging the sale of deceased estate property can be quite complicated. Under these circumstances, an executor should consult a solicitor and an accountant to understand how to best handle the process. Do not hesitate to contact the contested wills team at Armstrong Legal on 1300 038 223 if you need advice on any aspect of deceased estate administration. The team can also help you understand your rights as a beneficiary to stop the sale of a property.

Dr Nicola Bowes

This article was written by Dr Nicola Bowes

Dr Nicola Bowes holds a Bachelor of Arts with first class honours from the University of Tasmania, a Bachelor of Laws with first class honours from the Queensland University of Technology, and a PhD from The University of Queensland. After a decade working in higher education, Nicola joined Armstrong Legal in 2020.

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