Dealing with the loss of a loved one is never easy.
Some find it equally hard when they inherit a property which needs to be sold for the proceeds to be distributed to the beneficiaries. I hope this article will help families or individuals in such situations.
Firstly, we need to establish the following:
It does take some time to extract either a Grant of Probate or Letter of Administration. For a straightforward and non-contentious case, you can expect to get it done in about 2-3 months.
It can take more than 6 months for a more complicated case. Once ready, this will be valid for six years. It is also important to note this application needs to be done within 6 month of the decease passing.
Some families are anxious and start to market even before the Grant of Probate or Letter of Administration has been extracted. Depending on market sentiments, it may or may not be advisable.
When the resale market is thriving (like now in 2021), then there is really no need to start marketing too early as you are not able to seal the deal even if you do find an interested buyer.
Inherited a HDB Flat
Again, not everyone is looking to sell the flat. I have come across individuals who choose to keep the flat.
Beneficiaries can do that provided they are eligible and fulfill HDB’s housing requirements.
Do note, in order to keep the flat, you:
- Need to be a Singaporean/ PR above 21 years old (form a family nucleus) or are Singaporean singles above 35 years old etc.
- Do not own another HDB Flat or Private Property (if flat is purchase after 30 August 2010, if it’s bought before that – you can keep both your private property and the HDB flat – most people don’t know that),
- Are prepared to sell your current private property/ HDB flat within 6 months
Most of us would still need to sell the flat. For one, they are not able to fulfill the above criteria, or there are more than one beneficiary to the flats (e.g. siblings), and the proceeds are required to be split.
If you are looking to sell, you will need to notify HDB after the probate or letter of administration is ready. Set up an appointment with the designated HDB branch office. The executor or administrator needs to go to the branch office in person to sign the necessary documents. He/ She will also have to prepare the following:
- The will (if available)
- The grant of probate or Letter of Administration
- A copy of all the beneficiaries and the executor’s NRIC
- The title deed (if available)
- Death certificate
- Pay fees @ HDB Office
HDB will then take time to prepare the necessary documents, and send a letter in due course to notify of the next appointment, whereby the executor or administrator is required to sign more documents.
Once this is done, the executor or administrator will be reflected in the system (usually takes about a week or so), and can proceed to submit the Intent to Sell using their Singpass.
Once this step is completed, you are now free to issue an Option to Purchase 7 days after the Intent to sell has been lodged.
You can also get your lawyer to register your legal rights with HDB as the Executor or Administrator. But of course, it’s going to be cheaper to engage HDB’s services.
Given all the possible delays, I would always suggest using the time to prep the flat. More often than not, the house will require staging after personal belongings have been removed.
Once intent to sell has been successfully registered, then it’s time for your property agent to start marketing the unit for viewings.
How long do you have to sell?
If you check with HDB, they will advise “as soon as possible”. But they do exercise a lot of flexibility and compassion. After all, it can be hard to have to part with a long time family home. But do note that if you do not sell the property within 6 years, then you may need another court order before you can sell the HDB flat. This will result in more legal fees.
Inherited a private property
In terms of procedure, this would be much more straightforward. There is no need to submit an intent to sell. And it is also easier for those who would like to keep the inherited property as most of us would be eligible to own a private property unless the estate is a landed property where the beneficiaries will need to be Singaporean or PRs (with special permission).
It is important to note that the beneficiaries will also take on the outstanding mortgage loan (if any), quarterly management fees and property tax etc. So there is a need to check if it is viable to keep the property. Total Debt Servicing Ratio (all loans cannot exceed 60% of gross monthly income) would also apply.
What’s more, for a beneficiary who owns a HDB flat and has not fulfilled the Minimum Occupation Period, then he or she will not be able to hold on and also need to sell the private property.
Should you tell potential buyers that this is an estate sale?
I personally feel there’s nothing to hide. You may not need to emphasize on that but we should be truthful when asked by the buyers the reason for selling. Willing buyer, willing seller. From experience, it really does not affect the sale. What remains crucial is to prep the unit well before marketing. The physical viewing experience is what will make or break the deal.
Many landed houses I’ve come across are estate sales. A lot of these houses are rarely available and we end up having to compete with many interested parties.
How I handle Estate cases
I have personally handled a few estate sales for close family members. And it can be harder to navigate. While the executor or administrator would call the shots, he or she would usually also consult other close family members.
And interestingly at times, the one making the real decision could be another family member (son or daughter) and not the executor who is the spouse of the deceased.
There’s nothing wrong, but when there are more individuals involved (often some could be reluctant to sell), I would always be careful and sensitive to the needs of all these individuals involved.
What I would try to establish from the start would be for all important parties involved to be on board, kept aware of the sale procedure and all updates on viewings and offers.
Often, I feel this arrangement has worked well for me.
If you have any questions regarding the process and steps of this topic, feel free to drop me a message with your questions via whatsapp or the contact form.