Property Valuation for Deceased Estate & Arrange for Rent or Sale

• Sole Ownership
• Joint Tenants
• Tenants in Common
• Mortgaged Property

17.1.1 Sole Ownership

If the deceased person was the sole owner of the home or other property, then those properties will generally fall within the estate and will be distributed as outlined in the Will or based on legislation in your State/Territory.

17.1.2 Joint Tenants

If the deceased person owned the home or other real estate with another person jointly, then those properties will in most cases not form part of the deceased estate as they transfer to the surviving joint tenant. Further instructions may be noted in the Will.
Refer to Step 30.3.3 – Transfer Real Estate to find out how to transfer property to the surviving joint tenant.

Note: Where both joint tenants have passed, those properties will generally fall within the estate.

Note: Where both joint owners have passed, those vehicles will generally fall within the estate.

17.1.3 Tenants in Common

If the deceased person owned the home or other property with another person in common, then the portion owned by the deceased person generally falls within the estate and will be distributed as outlined in the Will or based on legislation.

17.1.4 Mortgaged Property

If the home or other real estate owned by the deceased is still mortgaged at the time of death, then the mortgage for a property will also transfer to the Beneficiaries with the property.

The mortgaging bank will in most instances have the right to expect all moneys owed. This means that if the property is sold and cannot cover the outstanding mortgage, then other assets need to be sold to repay the mortgage in full (see Step 14.4 – What are Creditors).

The deceased may have Mortgage Protection Insurance in place that covers the mortgage payments in the case the insured dies (see Step 25 – Claim Insurance & Other Benefits).

The Will may contain specific details and instructions on the distribution of the home and other real estate. The requests in the Will should be upheld to the extent that the law permits.

As with all assets and liabilities of the estate, you will need to get a good understanding of the property value for the purposes of tax, Grant of Probate application and final distribution. A general rule is to either get a paid valuation by an independent specialist valuer, or free appraisals by three different real estate agents to allow you to arrive at an average value.

If the property will ultimately be sold, the value may be less important as the final sales price will determine how much money will contribute towards the total estate value. However, where a property is distributed to a beneficiary, the valuation may be of greater importance to other beneficiaries for an equitable and fair distribution.
If you foresee that the value of the property may be a contentious topic among beneficiaries and it may be difficult to arrive at an agreed value from the free appraisals, a professional valuation is recommended.

Note: the value of all assets and liabilities are as at the date of death.

It may seem a good idea for the Executor to rent out property of the deceased estate to generate income during the administration process. However, based on legislation the Executors or Administrators can only enter into rental agreements upon receipt of a Grant of Probate or Letters of Administration (see Step 27 – Apply for Grant of Probate or Letters of Administration).

If deceased estate property is already rented out to tenants, the lease agreement continues between the tenant and the Executors or Administrators.
Should you need to terminate the current lease agreement you will need to provide notice in the appropriate period as outlined per the lease agreement.
Should a lease agreement come to an end during the estate administration process and the tenant requests their bond to be returned, you or the letting agent need to contact the relevant Authority in your State as follows:

It is not uncommon that the Executor or Administrator either require to or wish to initiate the sale of real estate during the administration process. It needs to be noted that final transfer of title and land can only occur once a Grant of Probate or Letters of Administration are obtained from the Supreme Court (see Step 27 – Apply for Grant of Probate or Letters of Administration).

• the Executors or Administrators are listed as the vendors; and
• special conditions are added to clarify that:
  – the buyer is aware of the property being sold by Executors or Administrators;
  – the sale is conditional on the Grant of Probate or Letters of Administration being granted by a specific date (note Grant of Probate applications can take multiple weeks or months depending on complexity); and
  – the settlement of the property will take place within a specific period after Grant of Probate or Letters of Administration being granted.

If the Grant of Probate or Letters of Administration are not obtained within the specific time frames, the buyer has the right to exit from the contract.
Refer to Step 30.3.3 Transfer Real Estate for detailed instructions on how to transfer property to the estate for sale.