Leaving house in deceased person's name.

[HierarchyOfMugs]

In England, is there a time limit for how long a beneficiary can leave a house in the deceased person's name? I.e. not update the land registry. Obviously, if it's not in the beneficiary's name they don't need to pay the additional stamp duty if they buy a house of their own. Can they just keep the house in the previous owner's name and collect the rent?

To be clear, I'm not planning on doing this - I think someone I know is planning on doing it.

I doubt it, a dead person can't have an asset, that's the point of the will - those assets legally become someone else's assets.

The executor has to deal with this. If the beneficiary wants the house and isn’t intending to sell it, the executor needs to notify Land Registry with the change of owner name. There are all sorts of legalities around being a landlord. Not officially owning the property would prevent them from actually being a landlord.

If the estate hasn't been distributed, then wouldn't the rent recieved form part of the estate rather than belong to your friend?

Your friend needs legal advice, not advice from MN!

Has probate been granted, have the executors applied yet, the deceased house is part of the estate.

Was the deceased person’s house already being rented before they died? We had this when my DM was in a care home and she died. The tenant stayed there a further 13 months but the rent all went to DM’s estate. The Landlord’s insurance was in my DSis’s name prior to DM’s death.
However, I suspect the situation you are talking about is different.

Thanks. This person is no friend of mine!

The house was already rented out before death. Probate has been granted. The executors & beneficiaries are the same people, DC of the deceased.
So the rental income would just go into the estate? The beneficiaries couldn't access it?

My brother is still living in the family home after my mother conveniently changed the will to a 75/25 split. He hasn’t put it through probate and she died in 2022 🙄

Found this online which suggests beneficiaries can't touch the rental income until probate is complete and the estate settled.

Who is Entitled to Rental Income During Probate?
During the probate process, any rental income from a property still forms part of the deceased's estate. This income should be collected and managed by the executor(s) of the estate, who are responsible for ensuring that it is used appropriately. Typically, rental income is used to:

• Cover ongoing property expenses such as mortgage payments, maintenance, and utility bills.

• Pay Inheritance Tax (IHT) and any outstanding debts of the estate.

• Be distributed to beneficiaries once probate is completed.

It is important to check the terms of the Will (if one exists) to determine who will ultimately inherit the property. Until the estate is settled, the rental income remains part of the estate and cannot be accessed by beneficiaries.

Obviously, if it's not in the beneficiary's name they don't need to pay the additional stamp duty if they buy a house of their own

Not sure that this is obvious!

The key here is that probate has been granted.
All rental income would pass to the Estate before probate, surely and then would be dispersed after probate?
Subsequent rental income after probate would pass to the person whose name was on the new rental agreement presumably?
In our situation there was rental income right up until the house was sold. But it all went to the Estate. Only after house was sold was probate applied for and granted (Scotland though) were funds dispersed. There will be a Capital Gains Liability to be considered.
I assume, OP, you are a bystander realising it is not being carried out by the book?

We had this situation so I checked with my Solicitor (I was executor) and she said it was Ok to leave it in my Mums name once I had Probate
I can't sell it as someone still lives there (complicated but not a Tenant) and it was going to cost a few hundred £ to put it in my name so I didn't and when I CAN sell it as long as I have Probate it is fine
To be honest I did expect to have been able to sell it by now as it will be 3 years in Feb

How can a dead person own a house, the transfer of title has to be granted to the new owner.

No idea but my Solicitor said I didn't need to transfer the house to my name and could leave it as is
However, given how long its been I may need to revisit it

My dad died in 2017 and the house was in his sole name. We haven't updated Land Registry. I did ask a solicitor about it but he said there was no urgency as he had willed it to my mum, probate has been granted and she's still living there, so there would be no questions over her ownership.

However, we're not renting the house out. The legality of them renting it out in their deceased father's name would be questionable, as surely you can't have a deceased landlord?

‘Revisiting this’ is mandatory, @Hoppinggreen ….. IANAL but I’d seek competent legal advice as a matter of urgency. I think that you were either given inaccurate advice or misunderstood something. You need clarity regarding this property.

Ok, I will check in The New Year but as we are a bit stuck at the moment with regards to selling it I'm not too worried
However, I do need to check I am not doing anything illegal

And @Hoppinggreen watch out for Capital Gains Tax when you sell as the allowances have all changed considerably.
OP, do you think the tenant knows their original Landlord passed?

Do I need to register a property in my name after probate · HM Land Registry

This suggests that its not an issue but I will double check

Thanks, I will have to pay CGT so will tell my Accountant when I do sell it
That doesn't worry me at all

If your mum died there would be problems if the house were to be sold or passed on as she wouldn't be named the legal owner, all you need to do is fill in a transfer form and pay a fee.

I am a distant relation of the beneficiaries. No idea if the tenants know about the situation. Deceased person could easily have told rental agency to deal with her DC years before they died, as they didn't like admin.

Interesting. I assumed this would as the reason for keeping it in the deceased person's name. Maybe not. 🤷‍♀️

I would suggest they get proper advice as they don’t want to be committing tax evasion

I’m not sure this makes sense. Rental income needs to be declared for income tax purposes. If the property is still in the deceased’s name it’s technically paid to the estate and distributed. They could be worse off for income tax purposes.

I think they should get advice as I seem to remember that if you inherit a share of a property there’s a time limit in which it doesn’t count as a 2nd home. I’m not a property lawyer so please don’t rely on this!

Actually I think they will be caught int he same way rayner was

although not a legal interest they do have a beneficial interest in the property so they will be caught by the extra stamp duty

but ultimately if the only reason they are delaying changing the name is so they don’t have to pay the tax they are basically tax evaders. Hope they don’t spend a lot of time complaining about the rich/starbucks!!