How do you sell an inherited house in Quebec?

Who can sell an inherited house in Quebec?

The succession opens at death, at the deceased’s last domicile (article 613). The heirs are seised of the patrimony, subject to the rules on liquidation (article 625). A successor who takes an intestate share, a universal legacy or a legacy by general title is an heir only if they accept (article 619). During the liquidation, the liquidator exercises that seisin. The designation or replacement of the liquidator is published in the register of personal and movable real rights and, where applicable, in the land register (article 777). The will may name one or more liquidators. A person the will calls an executor, or an administrator of the succession, is the liquidator (article 786). If the will does not name one, the office falls to the heirs, and a majority of them may designate the liquidator and how a replacement is chosen (article 785).

By default the liquidator has simple administration of the property (article 802). To pay the debts and the legacies by particular title, the liquidator may alone sell movable property that is perishable, likely to depreciate quickly or expensive to keep. The other property, which includes the house, may be sold with the heirs’ consent or, failing that, the authorization of the court (article 804). The will can change those powers (article 778). Éducaloi puts the same rule in plain words: if the will gives the liquidator the power to sell, the liquidator can sell the succession’s property; if it does not, the liquidator needs the heirs’ agreement or, failing that, permission from the court. If no liquidator was named, Éducaloi says the heirs can sell, and every heir signs the deed. Liquidators who serve together act in concert, unless the will or the heirs exempt them (article 787).

Does the will have to be probated?

The liquidator must search whether the deceased made a will and, if so, cause it to be probated and take the steps needed to carry it out (article 803). Probate is not the same step for every will. Article 772 says a holograph will, or a will made in the presence of witnesses, is probated on the application of any interested person, in the manner set by the Code of Civil Procedure. The known heirs and successors are summoned, unless the court grants an exemption.

A notarial will is different. The Gouvernement du Québec says a holograph will and a will made before witnesses must be probated after the death, and that a notarial will is an authentic act and does not need to be probated. Probate, by a notary or by the Superior Court, is what makes the non-notarial will usable: it establishes that the deceased wrote it or asked for it, confirms the form, and allows certified copies. The application is usually made by the liquidator. Éducaloi adds that a will made before a lawyer is verified in the same way, and that a notarial will is not. The Gouvernement du Québec also says you pay a fee to have the will probated. This page does not quote that fee. The notary or the court clerk states the amount in force on the day you file.

Where do you search the will registers?

Only the most recent will has legal value, and the search is mandatory, according to the Gouvernement du Québec. It is made through the single portal of the will and protection-mandate registers of the Barreau du Québec and the Chambre des notaires du Québec. One request goes to both orders. You then receive two search certificates, one from each. The Barreau confirms that the two certificates are issued separately even though the request is single, and that you can ask a notary or a lawyer to make the request for you. The registers record that a will exists. They do not hold the text. Éducaloi explains that the certificate names the notary or the lawyer who has the will.

The search needs official proof of death: a death certificate, or a copy of the act of death, from the Directeur de l’état civil. Éducaloi says a doctor’s attestation of death, and a declaration of death prepared by a funeral director, are not the right documents. A holograph will or a will made in the presence of witnesses is often not in a register, unless it was left with a notary or a lawyer. The Gouvernement du Québec says to look as well through the deceased’s papers, to ask family and friends, and to check a safety deposit box. Finding a will in a drawer does not replace the two certificates. The notary on the sale will ask for them.

What is the inventory, and how long is there to accept or renounce?

Liquidation means identifying the successors, determining what the succession holds, recovering claims, paying the debts and the legacies by particular title, rendering an account and delivering the property (article 776). The liquidator must make an inventory, in the manner set for the administration of the property of others (article 794). Éducaloi says that inventory is made before a notary, or in the presence of two witnesses who sign at the same time as the liquidator, and that it is dated. Closure of the inventory is published in the register of personal and movable real rights, by a notice that names the deceased and says where the inventory can be consulted, and in a newspaper distributed in the locality of the last known address (article 795).

A successor has six months from the day the right arises to deliberate and to accept or renounce. The period is extended, by law, so that the successor has 60 days from the closure of the inventory (article 632). During that time, no judgment may be rendered against the successor as an heir unless that successor has already accepted. Acceptance is express or tacit. It is tacit when the successor does an act that necessarily implies the intention to accept (article 637). Renunciation is express. It is made by notarial act en minute, or by a judicial declaration which is recorded (article 646). The heirs are not liable for the deceased’s obligations beyond the value of the property they take, subject to the exceptions in the Book on successions (article 625). Éducaloi and the Gouvernement du Québec both say the people entitled to inherit can all agree to let the liquidator skip the inventory, and that they then become responsible for the debts, including debts they did not know about. Éducaloi adds that a minor cannot give that agreement.

What is the declaration of transmission?

Before the house can be transferred to a new owner, the rights in it have to be published. Article 2998 says the rights of an heir, or of a legatee by particular title, in an immovable of the succession are published by registration of a declaration made by notarial act en minute. Article 2999 says the declaration sets out the deceased’s name, last address, date and place of death, nationality and civil status, and the matrimonial or civil-union regime if there is one. It also sets out whether the succession is legal or testate, the quality of each person, the relationship of each heir to the deceased, any renunciations, the property and the persons concerned, and the right of each in the property. The current text includes a parental-union spouse among the qualities it names.

Éducaloi describes that declaration as a kind of deed of ownership of the succession. It is signed before the house is transferred to a new owner. Once it is signed, the liquidator can sell or deliver the property in the succession’s name. If no liquidator was named, Éducaloi says the heirs can sell, and every heir signs. The declaration does not, by itself, replace the consent or the court authorization in article 804, or a power to sell written in the will. Our article on the papers a sale needs (What documents do I need to sell a house in Quebec?) puts this declaration next to the deed and the certificate of location.

Do the debts and the taxes get paid before the sale?

The debts are paid before the property is delivered to the heirs (article 776). If the property is sufficient to pay the creditors and the legatees by particular title, and provision is made for claims that are already in court, the liquidator pays the known creditors and the known legatees by particular title as they present themselves, and pays ordinary utility bills and debts that are due (article 808). A compensatory allowance and the other claims from the liquidation of the patrimonial rights of married, civil-union or parental-union spouses are paid as succession debts (article 809). If the succession is not manifestly solvent, the liquidator may not pay the debts or the particular legacies until 60 days after the closure notice is registered, or after an exemption from the inventory, except ordinary utility bills and debts that urgently need payment (article 810). If the property is insufficient, no debt or particular legacy is paid before a full statement, notice to the interested persons, and court homologation of a payment proposal (article 811). The proposal pays prior or hypothecary creditors by rank, then the other creditors, then support claims, then particular legacies (article 812). Known creditors who were skipped keep a claim against the liquidator and against heirs who were paid ahead of them (article 815).

The tax steps sit beside those rules. Revenu Québec says that, before you distribute the deceased’s property or pay the deceased’s debts, you must obtain a certificate authorizing the distribution of the property and, where it applies, of income earned by the succession after death. The request is form MR-14.A-V, Notice Before Distribution of the Property of a Succession, by mail, or online in My Account if you are the only representative acting as liquidator. Urgent expenses may be paid before the certificate if they do not exceed $12,000 and relate to the death, such as funeral costs, or to the property, such as electricity, heat or insurance. If property or post-death income is distributed before the certificate, Revenu Québec says you can be personally liable for the amounts owed, up to the value distributed, generally for four years from the distribution. The liquidator also files the deceased’s returns for the year of death, which ends on the date of death, and for any earlier year that should have been filed, including where there was a deemed disposition of capital property.

The Canada Revenue Agency’s form TX19 is the estate’s clearance certificate, requested before the assets are distributed. If the person who died also had a GST/HST number, the Agency also requires form GST352. A clearance certificate is generally not available if the estate does not have enough assets to pay the tax, interest and penalties. The request comes after the required returns are filed and assessed and the amounts are paid or secured, and after the Agency has been told who the legal representative is. A legal representative who distributes assets without a clearance certificate is personally liable for the unpaid amounts, up to the value of the assets distributed. Our article on a sale with a mortgage (Can you sell a house with a mortgage in Quebec?) explains how a hypothec is paid from the price when the price covers it. The full seller’s bill is in our article on costs (The real costs of selling a house in Quebec).

What happens to capital gains and the principal residence exemption?

When a person dies, the Canada Revenue Agency treats them as having sold their capital property, including a house, immediately before death, even though there was no sale. That deemed disposition is reported at fair market value and can produce a capital gain or a capital loss, unless the property passes to a spouse or common-law partner, or another exception applies. If the house was a principal residence, some or all of the gain may be exempt. Even where the whole gain is exempt, the final return still designates the property, on Schedule 3 and on form T1255. The Agency says you can designate only one property as the deceased’s principal residence for a given year. A property qualifies for a year if it is a housing unit the person owned, alone or with someone else, and the person, their spouse or common-law partner, a former spouse or common-law partner, or their child ordinarily inhabited it. The designation applies only until the date of death.

A sale by the estate after that date is a second question. The Agency says the gain on a later sale is generally the difference between the sale price and the fair market value reported for the property on the final return. Revenu Québec has its own designation. Form TP-274-V is how a person designates property they owned or co-owned as a principal residence and calculates the capital gain on a disposition, or a deemed disposition, during the year. It is filed with the income tax return and Schedule G, not on its own. A house that was rented, or that was a second home, may not qualify for every year it was owned. This page will not calculate a gain, and it will not say that inherited houses are free of tax. Some qualify. Some do not. Consult a notary or an accountant before you accept an offer or tell the family the house will clear tax-free.

What if the siblings disagree?

Disagreement about the sale and disagreement about who liquidates are different questions. Where article 804 requires consent, one refusal means there is no consent. The court can authorize the sale if the consent is not given. Éducaloi states the same choice: the heirs’ agreement, or permission from the court. A direct offer does not collect the missing signature and does not tell a family to sign anyway.

Who serves is decided first by the will (article 786). If the will is silent, a majority of the heirs may designate the liquidator (article 785). Liquidators who serve together must act in concert unless they are exempted (article 787). Any interested person may ask the court to replace a liquidator who cannot assume the office, who neglects it, or who does not fulfil the obligations. During that proceeding the liquidator stays in office unless the court names a provisional liquidator (article 791). Bruce talks to the person the notary will put in the deed.

Can the house be sold as it stands, and when?

There is no fixed number of days. Heirs who agree, and a clear notarial will, still wait on the will search, the inventory (unless the heirs waive it), the declaration of transmission and the tax certificates. A missing person, a will that must be probated, or a refusal that needs a court authorization takes longer. Emptying the rooms does not make the register move.

Bruce Malcolm is a private buyer of houses in Montreal and the West Island. He is not a broker, an agent or an appraiser, and he does not give legal or tax advice. The rules above apply to a sale to him as to any other buyer. There are no showings and no inspection, so the house does not have to be emptied or put in order first, and you choose the closing date once the notary can sign. The offer is made without the legal warranty, at the buyer’s risk. A defect the succession already knows about still has to be said. Our article on an as-is sale (Selling a house as-is in Quebec) explains that clause. The possession date is covered in our article on moving out (When do you have to move out after selling a house in Quebec?). A shorter note on an inherited Montreal house is on our situation page (Sell an inherited house in Montreal). If you want a number to discuss with the liquidator and the notary, you can request an offer. Sending the address does not commit the succession.