In this post we will discuss how to sell a house or other real estate in a California conservatorship court proceeding (or “conservatorship”).
Reasons for Selling Conservatorship House or Real Estate
Before answering that question, let’s answer a smaller question: If you’re the conservator, why would you want to sell the conservatorship real estate in the first place? There are many possible answers including, for example:
- The conservatee (i.e., the incapacitated person) doesn’t want to live in her house (and selling the house and investing the net sale proceeds is more advantageous for the conservatee than renting the house);
- The conservatee can’t live at home anymore because her care needs are so great, or her assets other than the house are so minimal, that sale of the house is required to generate funds to pay for the conservatee’s care in a residential care facility.
Initial Court Discernment
In contrast to selling a house or real estate in a probate decedent’s estate court proceeding, the Independent Administration of Estates Act (“IAEA”) does not apply to conservatorships. The streamlined processes for selling probate real estate with limited or full IAEA authority don’t apply here in a conservatorship.
The conservatorship real estate sale process resembles the process for selling real estate in a probate with no IAEA authority. In fact they are the same except for 2 differences. First, there’s some initial discernment when selling real estate that is the conservatee’s present or former personal residence. Second, there is a minor difference regarding the appraisal on the inventory. That means that the first step in the conservatorship real estate sale process is requesting prior court approval.
hen seeking initial prior court authority in a conservatorship to sell the conservatee’s present or former personal residence, you as the conservator must inform the court of the following:
- That you propose to sell the conservatee’s present or former personal residence;
- That you discussed the proposed sale with the conservatee;
- Whether the conservatee supports or is opposed to the proposed sale;
- The circumstances that necessitate the proposed sale, including:
- Whether the conservatee has the ability to live in the personal residence; and
- Why other alternatives such as in-home care services are not available.
Generally, the court may approve the sale only if 1 or more of the following apply:
- The conservatorship estate income is insufficient “for the comfortable and suitable support, maintenance, and education of the … conservatee” or those people whom the conservatee is legally obligated to support;
- The sale is necessary to pay the conservatee’s specific types of debts;
- The sale is in the best interest of the conservatee or those people whom she is legally obligated to support; or
- There is clear and convincing evidence of a “compelling need” to sell the personal residence for the conservatee’s benefit.
That is how the pertinent statutes are written. But to say that the court is approving the “sale” at this point is misleading. It is approving you as the conservator entering into an exclusive listing agreement and listing the personal residence for sale.
Approval of the actual sale would come later. Let’s get into that process.
The process for selling conservatorship real estate is the same as the default probate real estate sale process with no IAEA authority. This process is as follows:
- Obtain prior court approval to enter into an exclusive listing agreement with a real estate salesperson and to list the real estate for sale;
- Sign the exclusive listing agreement;
- Publish Notice of Sale in a local newspaper;
- File with the court an appraisal of the real estate;
- Accept a purchase offer on the required contract form;
- Arrange for increase of the surety bond amount (if applicable)
- Obtain prior court approval of the sale; then
- Forward a certified copy of the court order approving the sale.
The process is generally the same both in probates following the default rules with no IAEA authority and in conservatorships. We will discuss the differences.
First Court Hearing
Obtaining court authority in step 1 of a conservatorship real estate sale involves the items discussed under Initial Court Discernment above.
Updated Inventory and Appraisal
In a probate real estate sale with no IAEA authority, the inventory must be dated within 1 year of the court hearing for approval of the sale. In a conservatorship, if the sale pertains to the present or former personal residence of the conservatee, then the inventory must be dated within 6 months of that court hearing. The appraised value of the real estate on the inventory must also be dated within 6 months of that court hearing.
Get Help from an Experienced Probate Attorney
The rules for selling real estate in a conservatorship are complex. They contain many variables. Each of them is a potential pitfall for the unwary.
Hiring an attorney experienced with conservatorship can help the process to run smoothly and avoid trouble. The guidance of an attorney experienced with conservatorship court cases is also invaluable for attaining your goals in these cases.
At Meinzer Law Firm, P.C., we have over 20 years of experience helping clients achieve their goals in conservatorship cases. Contact Meinzer Law Firm, P.C., in Torrance to assist you with your California conservatorship court case.