Selling an Inherited House in Probate — California Probate Code §§ 10300–10316, 10500–10592

When a California house has to be sold during a probate administration, the Probate Code offers two routes. A personal representative who has been granted authority to administer the estate without court supervision may sell real property without a court hearing, but only after giving a notice of proposed action to the people the statute lists (§§ 10500(a), 10510, 10511). Every other sale of real property is reported to the court and confirmed before title passes to the buyer (§ 10308(a)).

Which route applies depends on what authority the personal representative holds. A personal representative with only limited authority must obtain court supervision to sell real property (§ 10501(b)(1)), while one with full authority has the power to sell it (§ 10511). Court-confirmed sales follow their own rules on notice of sale, appraisal and overbids (§§ 10300–10316). This page walks through both routes using the enacted text; it covers only the sections linked below, not every step of a probate sale.

Under the first route, a personal representative who has been granted authority to administer the estate may administer it without court supervision, but in other respects must administer it like any other personal representative (§ 10500(a)). When exercising authority to sell estate property, the personal representative may sell at public auction or private sale, with or without notice, for the price and on the terms the personal representative determines, and the rules for court confirmation of real-property sales do not apply to the sale. The statute names publication of notice of sale, court approval of agents' and brokers' commissions, sale at not less than 90 percent of appraised value, and the court's examination of necessity and of efforts to get the highest and best price (§ 10503). That is subject to the other limits of the part, including the notice of proposed action that the power to sell real property requires (§ 10510).

Authority comes in two kinds. A personal representative with limited authority must obtain court supervision for a sale of real property, an exchange of real property, the grant of an option to purchase real property, and borrowing secured by real property (§ 10501(b)(1)–(4)). A personal representative with full authority has the power to sell or exchange real property (§ 10511), to grant an option to purchase it (§ 10515), and to borrow against it (§ 10514(b)). The text used for this page does not include the sections on how full or limited authority is granted.

Two further limits apply. Whatever the authority, court supervision is required for a sale of estate property to the personal representative or to the personal representative's attorney (§ 10501(a)(5)). The statute relaxes that only for a transaction between the personal representative as such and as an individual, and only when all of these hold: the personal representative is the sole beneficiary or all known heirs or devisees consent, the period for filing creditor claims has expired, no request for special notice is on file or each requester consents, and each creditor who filed a claim has been paid, settled, withdrawn or consents (§ 10501(c)). The personal representative may also choose court supervision of any action (§ 10500(b)), and the will may restrict the powers the personal representative may exercise (§ 10502(b)).

A personal representative must give notice of proposed action when the section granting the power requires it (§ 10580(a)), and the power to sell real property is one of those: it may be exercised only if the notice procedure is satisfied (§ 10510). The notice goes to each known devisee and each known heir whose interest in the estate would be affected by the sale, each person who filed a request for special notice, and the Attorney General in Sacramento if part of the estate would escheat to the state and its interest would be affected (§ 10581). A person who consents in writing to the proposed action need not be given notice, and the consent may be signed before or after the action is taken (§ 10582). A written waiver describing the particular action, or the Judicial Council's statutory waiver form, likewise excuses notice (§ 10583). A waiver or consent can be revoked only in writing, effective when the personal representative receives it (§ 10584(a)).

The notice states the name, mailing address and electronic address of the personal representative, a contact person's name, telephone number and electronic address, a reasonably specific description of the action, and the date on or after which the action will be taken (§ 10585(a)). For a sale of real property it must also state the material terms of the transaction, including, if applicable, the sale price and the amount of, or method of calculating, any commission or compensation paid or to be paid to an agent or broker (§ 10585(a)(3)). It may be given on the Judicial Council's current Notice of Proposed Action form; a notice that does not use the form must be in substantially the same form and include a form for objecting (§ 10585(b), (c)). It must be delivered under § 1215 to each person entitled to it not less than 15 days before the date specified in the notice, and if mailed, to the person's last known address (§ 10586).

A personal representative may also give notice voluntarily, even where the power does not require it (§ 10580(b)). Listing agreements are a related power: the personal representative may grant an exclusive right to sell for a period not to exceed 90 days, and extensions to the same broker of up to 90 days each, without a notice of proposed action unless the original period and all extensions together exceed 270 days (§ 10538(a), (c)).

Any person entitled to notice may object by delivering a written objection under § 1215 to the personal representative at the address stated in the notice, either on the Judicial Council form or in any writing that identifies the proposed action with reasonable certainty and says the person objects (§ 10587(a), (b)). The personal representative is deemed to have notice of the objection if it is delivered or received at that address before the later of the date the notice says the action will be taken on or after, and the date the action is actually taken (§ 10587(c)). A person entitled to notice may instead ask the court for an order restraining the personal representative from acting without court supervision, and the court shall grant it without notice to the personal representative and without cause being shown (§ 10588(a)).

A sale of real property is an action that would need court confirmation if the personal representative held no independent authority (§ 10308(a)). When the proposed action is of that kind and the personal representative has notice of a written objection or a restraining order and still wants to proceed, the personal representative must take the action under the code's court-supervision provisions (§ 10589(a)). The person who objected or served the restraining order must be given notice of any hearing on a petition to authorize or confirm the action (§ 10589(c)).

Silence has consequences. A person entitled to notice who was given notice and does not object, or who waived notice or consented, loses the right to have the court review the action after it is taken (§ 10590(a)). The court may still review on motion of a person entitled to notice who shows they did not actually receive the notice before the time to object expired (§ 10590(b)), or of an heir or devisee who was a minor or lacked capacity when notice was given, if no notice reached, and no waiver or consent came from, their guardian, conservator or other legal representative (§ 10590(c)). A failure to follow the notice rules does not affect the validity of the action or the title conveyed to bona fide purchasers and good-faith third persons without actual notice of the failure (§ 10591(a)). The court may, in its discretion, remove a personal representative who gives no notice, waiver or consent where notice is required, or who acts despite an objection in violation of § 10589 (§ 10592).

Except as §§ 10301–10303 and § 10503 provide, real property of the estate may be sold only after a notice of sale has been published under Government Code § 6063a in a newspaper in the county where the property (or part of it) lies, and publication must be completed before the day on or after which a private sale may be made, or before the day of an auction (§ 10300). If the inventory and appraisal show the property is worth no more than $5,000, the personal representative may post the notice at the county courthouse instead, for at least 15 days (§ 10301). If it is to the estate's advantage, the court may shorten the notice time to not less than five days (§ 10302(a)), and a sale directed or authorized by the will may be made with or without notice (§ 10303). The notice states whether the sale is private or at auction, where bids will be received and the day on or after which a private sale will be made (or the time and place of an auction), and the street address or legal description of the property (§ 10304(a)).

A private sale may not be made before the day stated in the notice or later than one year after that day, and bids must be in writing, left at the place designated in the notice or delivered to the personal representative or the person the notice names (§ 10306). An auction must be held in the county where the property lies (or in any one of them if it lies in two or more) between 9 a.m. and 9 p.m. on the day in the notice (§ 10305(a), (b)). The personal representative may postpone an auction if the personal representative believes that is to the estate's advantage and announces it by public declaration at the time and place set, but the postponements may not total more than three months (§ 10305(c)). Whether private or at auction, bids must substantially comply with any terms in the notice (§ 10307).

A private sale cannot be confirmed unless the property was appraised within one year before the confirmation hearing, the appraisal's valuation date is also within that year, and the sum offered is at least 90 percent of the appraised value (§ 10309(a)); § 10207, which is not among the sections used here, is cross-referenced as an exception. A new appraisal may be had before the sale or the confirmation if the property was never appraised, the latest appraisal is older than one year before the hearing, its valuation date is more than a year before the hearing, or the court is satisfied that the latest appraisal is too high or too low (§ 10309(b)).

All sales of real property must be reported to and confirmed by the court before title passes to the purchaser, whether private or at auction and even when the will directs the sale (§ 10308(a)). If the personal representative does not file the report and petition for confirmation within 30 days after the sale, the purchaser may file them (§ 10308(b)). At the hearing the court examines the necessity for the sale, or its advantage to the estate and benefit to interested persons, unless the will authorizes or directs the sale (§ 10310(a)), and examines the personal representative's efforts to obtain the highest and best price reasonably attainable (§ 10310(b)). Any interested person may file written objections at or before the hearing and may testify and produce witnesses (§ 10310(c)). Where notice of sale was required, proof that it was given must be made before the order of confirmation (§ 10312).

A higher bid can be made at the hearing itself. If a written offer is made to the court at the hearing, the court shall accept it and confirm the sale to the offeror if (1) the offer is for at least 10 percent more on the first $10,000 of the original bid and 5 percent more on the amount of the original bid in excess of $10,000, (2) the offer is made by a responsible person, and (3) the offer complies with all provisions of law (§ 10311(a)). If more than one offer qualifies, the court accepts the highest (§ 10311(b)). The court may, in its discretion, decline an offer that qualifies, and then orders a new sale (§ 10311(c)). If the sale returned for confirmation is on credit and the higher offer is for cash or on credit, or the sale is for cash and the higher offer is on credit, the court may not consider the higher offer unless the personal representative informs the court before confirmation that it is acceptable (§ 10311(d)). In measuring the original bid and any higher offer, the court disregards any commission to which an agent or broker may be entitled and any condition that part of the bid be paid to an agent or broker (§ 10311(e)). These rules are subject to § 10207.

The same margin guards against a low original bid: the court confirms the sale to the original bidder only if it does not appear that a sum exceeding the original bid by at least that 10 percent and 5 percent margin, exclusive of the expenses of a new sale, may be obtained (§ 10313(a)(6)).

The court confirms the sale to the person making the highest qualifying offer, and directs conveyances to be executed, if it appears that the will authorized or directed the sale or good reason existed for it, the required proof of notice was made, the sale was legally made and fairly conducted, the amount is not disproportionate to the value of the property, and, for a private sale, § 10309 was satisfied (§ 10313(a)). On its own motion or on request, the court fixes the agent's or broker's compensation as provided in Article 3 (commencing with Section 10160), which is not among the sections used for this page (§ 10313(b)). If the requirements are not satisfied, the court vacates the sale and orders a new sale, noticed and conducted as if no previous sale had taken place (§ 10313(c), (d)).

After confirmation, the personal representative executes a conveyance that refers to the order, and a certified copy of the order is recorded with the county recorder where the property lies (§ 10314(a)). A conveyance made in compliance with the order vests in the purchaser all the right, title and interest the decedent had at the time of death, plus any additional interest the estate acquired before the sale (§ 10314(c)). If the sale is on credit, the personal representative takes the purchaser's note, secured by a mortgage or deed of trust that is subject only to encumbrances existing at the date of sale and others the court approves (§ 10315(a)). An omission, error or irregularity in the proceedings does not impair or invalidate the proceedings or the sale under the order (§ 10316).

This page is general information, not legal advice. Read the enacted text linked below, and talk to a probate lawyer about a specific estate.