Ins & Outs of Selling Real Estate Under Conservatorship 

What is Conservatorship?

A conservatorship happens in a situation when the person cannot any longer take care of his or her own person or finances. Normally, the spouse or one of the children asks the court to allow him or her to become a conservator; this is done by filing a petition with the court called “The Petition for Appointment of Probate Conservator”. In the petition you may ask the court’s permission to take care of another person’s personal needs (conservatorship of the person) or financial matters (conservatorship of the estate) or both. If you are a realtor, you will be more involved in the conservatorship of the estate because that particular conservator could have the power to sign your listing agreement.

There are three distinct types of conservatorship:

• General Probate Conservatorship -- For adults who cannot provide for their own personal needs due to physical injury, dementia, or other reasons that make them incapable of caring for themselves.
• Limited Conservatorship -- Only for a person who is developmentally disabled, and whose disability originated before age 18.
• Lanterman-Petris-Short (LPS) Conservatorship - Arranged for a person with mental illness. LPS conservatorships are difficult to obtain because there are laws to combat unwarranted involuntary commitments to mental institutions by private parties with unscrupulous motives (think of Angelina Jolie in Changeling or Jack Nicholson in One Flew Over the Cuckoo’s Nest).

Selling Real Property under Conservatorship

There are things such as paying out ordinary living expenses that do not require prior permission from the court. However, the sale of real property absolutely requires court approval. As the English say, “A man’s home is his castle”. A person’s home is regarded as a special asset. One of the things that a judge looks at in deciding whether to allow the conservator to sell the conservatee’s home is whether or not the conservatee will be living at home or will be returning home some day.

After getting the judge’s approval and before selling the conservatee’s home, whether or not the conservatee is living there or not, is a second step called the court confirmation process. These are two separate and distinct legal procedures. The court confirmation of selling a home in conservatorship is the same procedure as the probate “limited authority” court confirmation process in selling a home in probate after the judge’s permission has been granted to sell the conservatee’s home. A realtor would use the California Association of REALTOR’s form: “Probate Listing Agreement and Joint Escrow Instructions”, the same form used in a regular probate listing. The listing agreement is only good for 90 days, but it can be renewed with the judge’s permission. The selling price of the home must be at least 90% of the value stated in the Inventory & Appraisal form AND this form cannot be more than one-year old at the time of court confirmation. After all sale contracts are signed and all pertinent contingencies are removed, the probate attorney will prepare and file a form called “ Report of Sale and Petition for Order Confirming Sale of Real Property” to secure a court confirmation date before the judge. On the court confirmation day, the probate attorney will appear along with the real estate agents (listing agent and selling agent) and, possibly, any other bidders. If there are bidders involved, then the sale of the conservatee’s home will go to the winning bidder and judge will sign an order with the winning bidder’s name on it so that the title and escrow company can close the real estate transaction. c