The use of forms in estate settlement

Whether you are acting as seller’s broker or buyer’s broker, there are cases where you are called upon to act in the context of an estate settlement.

As seller’s broker

Suppose a client comes to you and tells you that his mother has passed away and he is representing the estate, i.e. the people who are inheriting the deceased's property. The client informs you that as part of the estate settlement, the heirs have decided to sell their mother's residential property. After discussing the matter and after verifying that the liquidator is authorized to do so, you prepare to sign a Brokerage contract - Sale with him.

Question: As a seller’s broker, should you use the mandatory brokerage contract and have the Declarations by the seller of the immovable form (or Declarations by the seller of the immovable – Divided co-ownership form) completed even if the immovable belongs to an estate?

Answer: Yes.

In estate law, the heirs have the same rights and obligations as the deceased. The Real Estate Brokerage Act is a public policy statute designed to protect natural persons who are selling a residential immovable. Thus the estate is entitled to the same protection as the owner would have received if she had sold the immovable prior to her death. You are therefore required to use the Exclusive brokerage contract – Sale of a chiefly residential immovable containing less than five dwellings form.

Important documents

It is essential that brokers know and understand succession documents. Because of the specifics of the Law of Succession,  brokers must take into account their limits and should not hesitate to consult a notary if necessary. 

The will
The will contains the information as to whether the liquidators have simple or full administration of the property of the deceased person to sell the immovable. Brokers must therefore obtain a true copy of the will. However, due to the confidential information contained in this document, the client may be reluctant to provide a copy. If this is the case, the broker could suggest that his client ask the acting notary to provide him with a certified extract of the will pertaining only to the liquidator's administration powers.

The declaration of transmission
It is a document published in the Land Register by the notary specifying the name and contact details of the deceased person, his heirs and the liquidator, the description of the immovable, the share belonging to each, as well as the type of succession in question.

Will search certificate
It  is a document issued by the notary certifying that the will provided is indeed the last one legally drafted. Whether or not a will has been left, you must make a request for a will search in the Registers of Testamentary Dispositions and Mandates of Quebec. Note that the will search certificate is a useful document, but when the declaration of transmission of immovable property is published, it becomes less relevant. In this case, it does not have to be kept on the broker's records.

Before entering into a brokerage contract, what documents should be obtained and kept?

Before moving forward, the broker must obtain and keep the following documents:

  • The testament (a certified true copy or a certified true extract outlining the simple or full administration powers of the liquidator)
  • The declaration of transmission (unless there is a special situation)
    • The best practice is to have it on hand when signing the brokerage contract. However, the declaration of transmission may not be available at that time. In this case, it is possible to enter into a brokerage contract if the broker has in his possession a copy or certified extract of the will and the will search certificate and has consulted the client's notary. It is important in this situation that the broker adequately advise the seller about the deadlines to consider for signing the deed of sale (the declaration of transmission must be signed and published before transferring the titles to the buyer)
  • The will search certificate (necessary only in the absence of the declaration of transmission when the brokerage contract is taken up)

What is the difference between full and simple administration assigned to the liquidator?

The broker must read the documents and check whether the appointed liquidator has full or simple administration. Full administration empowers the liquidator to sign all the documents related to the sale of the property on behalf of and for the estate. For its part, simple administration does not allow the liquidator to make decisions alone concerning the estate and the sale of the property. The broker must then obtain the signature of all the heirs or a power of attorney from them in favour of the liquidator or another trustworthy person.

As buyer’s broker

Now, suppose you are working with a buyer to find him a residential immovable. After some research, you find a real gem. The immovable is listed by another broker. You call him for information and he tells you that "the immovable is being sold by the estate". After a second visit, your client wishes to present a promise to purchase.

Question: As a buyer’s broker, should you use the Promise to purchase form even if the immovable is being sold through an estate?

Answer: Yes.

For the reasons mentioned above, under the Real Estate Brokerage Act, this sale must be handled as the sale of a chiefly residential immovable containing less than five dwellings owned by a natural person. You are therefore required to use the Promise to purchase form.

For any question, feel free to contact Info OACIQ.

For more information, please read the following articles:

You can also consult the professional practices guide entitled Opérations de courtage: Recourir aux règles de droit (available in French only)

 

Last updated on: January 25, 2022
Numéro d'article: 122916