If you want to buy or sell probate property, there are additional considerations outside of a normal buy-sell transaction. There are exhaustive court procedures and statutory requirements under the California Probate Code that dictates what is required for a proper sale to take place.
Generally, if the decedent did not have a in place, the court will appoint an administrator for the probate estate. The administrator may be given full or limited authority under the Independent Administration of Estates Act (IAEA), California Probate Code section 10400 et seq. The administrator may sell probate property by public auction or by private sale.
If an administrator is provided full authority, he or she does not need to seek court confirmation of the sale. If an administrator is given limited authority under the IAEA, he or she will need to seek court confirmation of the sale. Regardless, the administrator must provide a notice of proposed action under California Probate Code section 10580 et seq., which includes a list of requirements needed to provide adequate notice of the sale to heirs and others entitled to notice (known as “interested persons”).
Interested persons will have 15 days to object to the sale, and the sale may proceed if there is no objection. Upon which, if the administrator has full authority and the court is not involved in the sale, the sale may proceed to escrow. If an interested person objects to the sale, then the sale will come under court supervision and will be subject to a process in which the public can participate in an overbid procedure so that the property can be sold at the highest price at a hearing to confirm the sale. Where the administrator has only limited authority, the court must hold a hearing to confirm the sale and the overbid procedure will also take place.
The overbid process may be a wildcard, because members of the public can participate and have an opportunity to place the winning bid to the property. This is true even in a typical situation, where a potential buyer has already made an offer to the administrator, obtained financing, obtained approvals, and completed virtually everything short of entering into escrow. The overbid process is detailed under California Probate Code sections 10311 and 10303. The original buyer can take part in the overbid process.
Once the court issues an order confirming the sale, a certified copy of the order is typically provided to the title company or escrow, as the order must be recorded with the conveyance.
The process of selling and purchasing real property through probate is highly technical and this overview is not meant to be comprehensive. Whether you are an administrator or potential buyer of real property within a probate estate, please seek advice from a qualified attorney.
Schorr Law is experienced in dealing with probate disputes involving real property. Contact us today to schedule a consultation. Call (310) 954-1877, or email us at firstname.lastname@example.org