Can You Live in a House During Probate? | New Mexico Financial & Family Law

The death of a loved one can significantly disrupt lives. One common scenario is that a relative or other individual close to the decedent lives in a house or on a property owned by the decedent. With the decedent passed, the tenant may understandably be nervous. They will have many questions: What happens to a house in probate? Will they get kicked out? Is it even legal to occupy the house during this time?

The answers to these questions largely depend on two factors:

Any written or contractual agreements between the decedent and the lessee/tenant
The inclinations of the personal representative of the estate (executor)

These two factors aside, know that property owned by the decedent is still technically held within their estate until probate is completed. The “estate” owns it, formally, as if the decedent still held all of their possessions. This limbo-like state can provide lots of leeway for someone living in a house of the decedent, but it can also present complications.

If you are a personal representative of an estate or someone with interest in how the estate is handled during probate, you can receive guidance for your specific legal questions from a New Mexico probate lawyer. They can help you understand your situation, the options available to you, and the best courses of action you could take to fulfill your specific goals.

Existing Lease Agreements and Other Arrangements May Stand Through Probate

In most situations, any outstanding leases or agreements put in writing can remain intact throughout the course of probate. Anyone living in a house formerly owned by someone who has recently passed still technically has their lease in effect, assuming a formal lease was signed.

In addition, so long as a tenant has expressed, documented permission to live in a house owned by a relative or someone close to them, then there is a presumption that they will continue to be able to live in that residence or unit for the time being. Ideally, this agreement will have been put in writing, but verbal confirmation among surviving relatives or those with an interest in the estate can suffice — so long as there is consensus on the issue. If there is no written agreement, and one or more individuals with an interest in the estate object to the tenant remaining on the property, they can request that the estate’s personal representative take steps to remove the tenant from the property.

The Personal Representative of an Estate Has Broad Authority Over Property

Under most circumstances, the status quo before the death of the property owner can remain intact. However, the person assigned as the representative of the estate has the authority and discretion to take certain actions in order to manage the estate to the best of their ability. They have a fiduciary duty to act in the best interests of the estate as a whole, which includes the interests of any heirs/devisees. They also have an expectation to respect the wishes of the decedent as if they were still alive, at least until probate is completed.

At the personal representative’s discretion, they may decide it is in the interests of an estate to no longer make a property available for occupancy. There are three primary reasons this may take place:

The representative must sell the property to free up money to pay creditors and administration costs
The representative must sell the property to liquidate the assets in order to distribute the value of the estate to heirs as-indicated by the will
The representative feels it is in the best interests of the property to remove an occupant because they are harming it or committing illegal activities on the premises

If there is an existing lease, the representative must have a valid reason to break the lease early. That may include situations where a tenant is violating the lease agreement, or the representative may be able to invoke an early termination clause. In either case, they have to give the occupant ample notice, typically 30 days or more. In cases where a tenant is performing illegal activities on the property, they can be given as little as 3 days notice.

If there is no formal lease or other documentation stating specifically that the occupant has permission to live on the property, the representative has the discretion to effectively evict someone and remove them. Notice may still be required, under the law, depending on the situation. It is advisable to perform due diligence before taking such actions against occupants, just in case there is cause for the occupant to remain on the property. They may also be legally provided the protection of a 30-day notice.

After Probate, the New Owner Has Sole Discretion Over Their Property

While a home is in probate, there is no requirement to free up a property or otherwise evict its current occupants. If a personal representative decides it is in the best interests of the estate to remove someone and/or to sell the property to free up needed cash, then they have the authority to give the occupant notice to vacate.

However, once probate is over, the home then passes to the new owner. The new owner has an obligation to obey leases and other contractual agreements, but not informal arrangements. Unlike the personal representative, they are not required to consider the wishes and intentions of the decedent once probate is over and the estate is effectively dissolved. There may be protections available to the occupant, especially if there is a lease, but the new owner has full reign to make whatever decision they want with the property.

With that said, there are many situations where a property changes hands, but the tenant can remain in the house as if nothing has happened. In these circumstances, things may change, like the price of rent or the property management services provided, but it is entirely possible for a house to go into probate then change hands without the occupant’s life being disrupted.

That said, recognize that the new owner will face tough choices in many situations. Very often, a home that has been inherited will have to be sold to cover outstanding debts or any tax obligations that stem from the inheritance. It is advisable for occupants to be in contact with the personal representative and, if possible, the new owner (although the identity of the new owner may be concealed).

What About Properties Jointly Owned or Transferred Outside Probate?

Many properties are owned in joint tenancy with transfer-upon-death or survivorship rights written into the deed. A property can also be held in trust and bypass probate entirely.

In cases such as these, the arrangement depends on the language of the deed or the details of the applicable trust.

Get Assistance Managing Property During Probate With Experienced New Mexico Attorneys

Whether you are an heir, a personal representative, or someone with a vested interest in a property, you can benefit from speaking to a probate attorney in New Mexico about any concerns you have. There are many gray areas of the law, especially where probate is concerned, and you may encounter unexpected challenges or complications to your goals.

New Mexico Financial & Family law is here to provide you with knowledge, guidance, and peace of mind. We work closely with our clients to research the applicable laws and inform them of all of their options. We can also help simplify the process of probate, property transfers, or enforcing your rights as they concern an estate. Reach out at (505) 503-1637 or contact us online to get answers to your questions and seek the best path forward.