We are often presented with scenarios wherein heirs have contracted to sell real property. In most cases, the heirs and their Realtors have been diligent in the initiation of the proper administration of the estate in the county in which the owner died. In these cases, the estate matter usually poses no major issue, and the transaction can likely close on a normal schedule.
However, many times, the decedent’s estate is probated in one county, but the subject real estate to be sold is located in another county. In these instances, the administrator or executor of the estate must provide for the filing of estate documentation in the county in which the subject property is located. The filings of these documents are important to maintain the chain of title. While the filing of the estate in the other county simply amounts to taking copies from the estate file in one county and moving them into a “new” estate file in another county, this step can take some time: someone has to retrieve copies of the documents in one county; have that Clerk of Court attest that the copies are in fact “exemplified;” deliver the original, exemplified copies to the Clerk of Court in the other county who will open the new estate file; and pay the nominal fee. Even if the two counties involved in this type of estate scenario are adjacent, the additional administration outlined above can create delays – especially if neither the estate’s administrator nor any of the heirs live in the vicinity.
Real property sales involving estates can become a bit more complex if the decedent’s estate was probated outside of North Carolina. While the estate may have been properly administered in another state, an ancillary estate must be administered in North Carolina in the county of the subject real property – and, that ancillary estate must be administered pursuant to North Carolina laws governing estate administration. Heirs and Realtors should be wary that simply because a final accounting was filed with regard to the decedent’s estate in Virginia, for example, a full estate administration may be required in North Carolina. Such a full administration might involve (among other things) the creation of a new estate file under North Carolina procedures and the publishing of a Notice to Creditors of the estate – each of which, if not addressed early in the pre-contract or contract “phase” of the transaction, may delay the closing.
Dealing with estates in a real estate transaction can add a layer of complexity to the closing process, but if you have some basic understanding of estate administration and work closely with your closing attorney, delays can be minimized or avoided.
Published on June 7, 2016