Sometimes a family wants or needs to sell a house after an owner passes away. People are often confused about who has the legal right to do so, particularly if there is disagreement among the family members about whether or not the property should be sold and what will happen to the proceeds.
The first question that must be answered is who is the owner of the property? The answer is sometimes not as simple as it might seem. The owner is the person (or the people, if more than one owner) whose name is on the deed recorded when the house was purchased, or who received an interest in the property later by a subsequent deed. How might this happen? Typically, it is a result of an earlier death, a divorce, or transfers to family members.
To find a definitive answer to this question, someone needs to get copies of recorded deeds going back to the time the deceased person acquired the property. In Colorado this must be done by visiting the clerk and recorder’s office in the county where the property is located, or by requesting a title report from a title insurance company. Some states post real estate deeds online, but Colorado does not. Title companies charge a small fee for their reports.
If there are one or more surviving joint tenants shown on the deed records, the survivor(s) can list and sell the house. What is a surviving joint tenant? It is a person whose name appears on a deed that identifies them as a joint tenant or states that they received their interest “in joint tenancy” or “as joint tenant” or similar language. If the deed just names two or more people as owners, without any mention of joint tenancy, the owners are deemed by law to be “tenants-in-common” who each own an undivided part of the property. One tenant-in-common cannot sell the entire property without participation of the others.
If there are no surviving joint tenants, if the deceased person was the sole owner, or if he or she was a tenant-in-common with others, someone will need to apply to the court to appoint a personal representative to have authority to sell the property. If the court approves, it will issue Letters Testamentary or Letters of Administration to the personal representative. He or she will then have the legal authority to list the house for sale and transfer it to a buyer, although any other tenant in common will need to consent. The money received from the sale will then need to be distributed by the personal representative to the persons identified in a will or to the heirs under the law, if there is no will.
Simple example: John T. Smith and Mary A. Smith own their home as joint tenants. John dies. Mary can sell the house by herself using a death certificate and name affidavit at closing. She can sign a real estate listing agreement, deed and all other closing documents. She gets all the money from the sale.
More complicated example: Mary Smith, a widow, did not sell the house after her husband’s death and owns it at her death. She has four adult children who get along well. She has a will naming oldest child as personal representative. Oldest child has to file some documents with the court in the county where Mary lived. He then receives Letters Testamentary from the court. He can now sign listing agreement, Personal Representative Deed and all closing documents. He’ll need to record his Letters Testamentary with the deed at closing. The money from the sale will be distributed according to the will.
Even more complicated example: Same situation as above, but Mary did not have a will and her children don’t get along. No one can sign a listing agreement, deed and closing documents until the court appoints a personal representative. The children will either need to all agree as to who should be appointed personal representative or the court will have to decide who it should be. It might be one of the children or it might be a bank or professional personal representative. This could all take a long time and cost a lot of money. Even if a buyer makes an excellent offer, no one has authority to sell the house until a personal representative is appointed by the court. After a sale, the money must be used to pay estate bills with the remainder divided equally among the four children.
For help dealing with the legal, financial, and social aspects of life in the aftermath of a spouse’s death, check out “Life After Death: A Legal and Practical Guide for Surviving Spouses” by Marilyn McWilliams.