We are seeing more situations where a trustee selling a home with a relative living in an inherited house, the relative refuses to move, requiring a sheriff eviction. In most cases, they are not paying rent, and in some cases not paying utilities. The home needs to be sold and the relatives refuse to move out.
This is a case study of selling a house in an irrevocable trust after death and how we helped the Trustee selling a home with a relative living in an inherited house who refused to move.
Successor Trustee Fiduciary Duties
We were contacted by the trustee of a living trust. The creator of the trust was dealing with declining health issues for a couple of years and was unable to care for theirself. The trust provided that in the event the creator of the trust was unable to care for theirself, a named successor trustee would become the trustee of the trust and manage the financial affairs as well as care for the person.
The creator of the living trust was near death when we were contacted to get help. At this time, the successor trustee named in the trust has already taken on the role of trustee.
Knowing the death was imminent in the foreseeable future, the trustee wanted to prepare for what they knew was coming and the job they needed to do after the death of their loved one.
After a lengthy phone consultation establishing the facts, we knew a trust attorney and a real estate attorney would be necessary before we could step in and manage the sale of the home. Often in situations like this, the home is the most valuable asset. That was the case in this situation as well.
Within days of receiving the initial call, we were notified that the creator of the living trust had died. We suggested the person acting as trustee contact one of our recommended trust attorneys to get the help they needed.
Relative Living In Inherited House
Can a beneficiary force sale of inherited property?
The relative living in the home refused to move. Months passed, and despite the trust attorney’s good faith efforts to encourage the family member to move so the house could be sold, the family member refused to move.
A real estate attorney specializing in evictions was retained to manage the eviction process.
The attorney prepared the legal documents which were served on the family member residing in the home.
The video below discusses the legal process that must be followed when tenants, even family members, refuse to move.
After the legal documents were served, the family member refused to move and the case was set for trial.
This case was set for an eviction trial however the relative living in inherited house did not appear in court. That meant judgment was issued by default and a Writ of Possession California eviction was sent to the Sheriff’s Office for processing.
What could go wrong?
The eviction attorney recommended by the trust attorney failed to complete the form that gets sent to the sheriff’s office with the Writ of Possession. Thankfully, the trained sheriff personnel know not to trust the forms that come from the eviction attorney’s office.
On the day the eviction is scheduled to take place, the officers call to verify the eviction is scheduled, confirm who will take possession of the property, a locksmith will be standing by to change the locks, and they ask the questions on the form, the questions the eviction attorney’s office answered “no” to each question despite the fact that both the eviction attorney and the trust attorney we informed otherwise.
The person occupying the home was:
• Emotionally unstable
• Possessed several firearms
• Threatened many times throughout the process that they would use the firearms
When the sheriff’s office called and asked the list of questions, most of which were answered “yes”, we were advised that the eviction could not take place on the scheduled date.
There is a process dealing with the elderly, emotionally unstable, physical limitations, etc. They will not just throw these people out onto the streets and call it a day. They call in other resources such as social services and other city and county resources to work with the occupant. They will also connect with family members if available. The goal is to ensure they get placed where they safe and have food and shelter. This is absolutely the right thing to do!
What happens when the sheriff comes to evict you?
Day after day the Sheriff officers knocked on the door and the family member did not answer. In this case, social workers, family services, and other city and county personnel knocked, and the occupant would not answer. They left business cards. They called the occupant and left voice messages. Family members finally responded and stepped in to help, understanding that it was not a matter of if the relative would be evicted, it was a matter of when.
On the 6th consecutive day of an ongoing effort, the relative agreed to be taken to a safe place. The locksmith was standing by, the locks were changed, the home was secured and after over 6 months from the first call from our client, we were finally able to tell our client the eviction was completed however the process was not.
The owner must keep the possessions in the property or store them and protect them for 15 days and allow the person the opportunity to return for their possessions.
Given the magnitude of hoarding in the home, our client decided to just leave everything and wait 15 days so the remaining contents, if any, could be removed.
Hoarding is a Real Thing
This situation was beyond inheriting a house full of stuff.
Our client, the trustee selling a home, lives in another state, and had not seen the home for several years. They were aware of hoarding taking place for years. After the sheriff eviction was complete, we took over 100 photos and placed them in the cloud so our client could see what we were dealing with.
We obtained several estimates to clean out the contents so the home could be sold.
The family member arranged to return to get their belongings. 13 people showed up on day one and worked 4 solid hours removing things. They needed more time and arranged to return to move more items. More people showed up on day two and worked 5 solid hours moving things.
A team of people continued to move things from the home. There was no end in sight. Eventually, their time ran out. At that point, the owner, trustee of the trust, could do whatever they wanted with what was left behind.
We have seen many hoarding situations. This was at the top of the list in terms of the worst we had ever seen. It was definitely not safe or healthy for anyone to be living in such conditions.
Perhaps the silver lining to such a heart-wrenching situation is that the family member is no longer living in unsafe and unhealthy conditions.
I met the family member who resided in the home the day the eviction. Sweet person. If they were a parent or sibling of mine, I would be thankful they are no longer living in such conditions. I also met two family members. Both nice people who did all they could to cooperate with the eviction process and ensure their loved one was in a clean safe place with food and shelter.
We would need to be something less than human if seeing people live in such conditions does not affect us. Even if the hoarding conditions were not present, we do not enjoy seeing anyone get evicted from their home.
The house belonged to the person who created the trust and had died. The terms of the trust were clear. The person residing in the home did not have a legal right to remain in it after the owner died. Although these situations pull heavy on the heart, we do not make the laws nor can we unilaterally change the laws. At the end of the day, we must all do our jobs.
NOTE: The photos shown above are not photos of the home we sold. They are from another home and shared to illustrate the types of hoarding situations we encounter.
Trustee Selling a Home | Plan B
After seeing the photos and the estimates to clean out the home, although it was not the original plan, the trustee did fly to San Jose to see the home. The experience was overwhelming. We spent several hours together discussing the condition of the home, what it would take to get it cleared out, and the options for ways we could market and sell the home.
The original plan was to get the home cleared out and list it on the Multiple Listing Service (“MLS”) and sell it on the open market. After walking through the home, the trustee asked me “Can we sell just like this?”
I asked for clarification: “Do you mean just like it is right now with all of the trash and other items?”
The look in the trustee’s eyes and face were telling. Keep in mind, we had been talking with and working with this person for months. Seeing the photos was one thing. Being in the home and experiencing the magnitude of the hoarding was another.
The Trustee’s response to my question was: “Yes.”
Trustee Selling a Home Off Market
Generally speaking, an off-market sale may not generate the highest and best price for a seller. Off-market sales do not get the same exposure as a home listed on the MLS and syndicated to public real estate portals.
Given the hoarding situation, listing the home, and allowing people to enter the home presented too much risk and liability.
The options were discussed with the trustee who made the decision to first attempt to sell the home off-market. If that did not work, then the trustee would want the home listed on the MLS. If we went that route, the home would be shown by appointment only with the listing broker, Kathleen Daniels, present.
We were successful in selling the home off-market without listing it on the MLS.
What is a Dual Real Estate Agent?
In California, with the consent of both the buyer and the seller, a broker is allowed to act as a dual agent. The real estate broker, or agents working for the same broker, who act on behalf of both the buyer and the seller in a transaction, create a dual agency situation.
The trustee had received over 25 letters from real estate agents asking to sell the home and investors wanting to buy the home.
It has been our policy and best practice since January 2003 to avoid dual agency. Could we make more money if we embraced a dual agency? Can the broker and/or brokerage make more money?
You can bet on that! The industry refers to this as “double-ending the deal”.
My duty representing a seller is to work on the seller’s behalf. My duty representing a buyer is to work on the buyer’s behalf. For us, that typically presents a conflict of interest.
When we took the listing for this home, we had an in-depth discussion with the trustee advising that it is our best practice not to represent a buyer on our listing and explained why. The trustee agreed it would be best if the buyer had their own representation.
While at the property one day we were approached by an investor who happened to be driving by. When they saw us and the activity at the house they stopped and asked, “Are you the real estate agent?”
The person driving by happened to be among the people who sent a letter to the trustee asking to purchase the home. We chatted for several minutes and exchanged business cards. Later that evening the investor called to discuss moving forward with an offer. The prospective buyer was asked if they had a real estate agent. The answer was yes however they wanted us to represent them.
We called our client and outlined the terms of the offer and explained the buyer wanted us to represent them on the purchase. This conversation took us back to the discussion we had at the time the listing agreement was signed.
The trustee wanted us to represent the buyer. The risk of a dual agent situation was actually low given the circumstances. The paperwork was drawn up and all parties signed. Ten days later the sale closed. The trustee was happy, and the investor buyer was happy. Kathleen made buying a successor trustee sale seem easy.
Nine months passed from the day of the first call from the trustee selling a home with a relative living in an inherited house that resulted in the sheriff eviction process to the time we closed escrow on the sale of the home.
These situations are not easy, they take time, patience, and require legal help.
Experience Makes the Difference
Never say never. Never say always. There are exceptions in life. Never is a long time. Always is forever. When it makes sense to do something, it is the right thing to do, and it is what the client wants, we do it.
Kathleen Daniels, Real Estate Broker earned a Certificate in Professional Fiduciary Management for Trustees from California State University, Fullerton. She understands the complexities of real estate transactions and the role of a trustee.
Selling a property in a irrevocable trust requires the real estate agent to have specialized knowledge and training as does selling property held in trust.
Her education, knowledge, training, experience, and high standards set her apart in the real estate industry. While this transaction was not “easy” Kathleen’s education, knowledge, training, and experience allowed her to make it look easy to the trustee selling a home with a relative living in an inherited house, which required a sheriff eviction.