Selling an apartment building through probate in Los Angeles County

Who can sell the building, and when?

Only the personal representative can sell a building that sits in a probate estate, and only after the court has issued letters. Probate Code section 8400 says a person has no power to administer an estate until appointed, and that the appointment takes effect when letters issue. The order appointing you has to say so on its first page, in capital letters: THIS APPOINTMENT IS NOT EFFECTIVE UNTIL LETTERS HAVE ISSUED.

The personal representative is either the executor named in the will or an administrator the court appoints. The court's letters are issued on Judicial Council form DE-150. An executor receives letters testamentary, and an administrator receives letters of administration. Either way, the letters are how you prove your appointment to the people you deal with, which in a sale means the escrow officer, the title company and the buyer's side.

Before letters issue, section 8400 lets a named executor pay funeral expenses and take the measures needed to maintain and preserve the estate. For a building, think of keeping the insurance in force or stopping a leak. Selling is administering the estate, and it waits for letters.

An heir who is not the personal representative cannot sell or sign for the estate. What an heir gets is notice and a voice. Under Probate Code section 10581, a Notice of Proposed Action goes to each known heir and each beneficiary under the will whose interest the sale would affect, and to anyone who has filed a request for special notice.

Opening the case starts with a Petition for Probate, form DE-111, filed in the Superior Court of California, County of Los Angeles. Notice of the hearing is mailed to the people entitled to it and also published in a newspaper. Probate Code section 8121 puts the first publication at least 15 days before the hearing and treats three publications, with at least five days between the first and the last, as sufficient. If the court grants the petition, it signs the order for probate, form DE-140, and that order states whether you may administer the estate under the Independent Administration of Estates Act, and with full or limited authority.

Will the sale go through full authority or court confirmation?

The order for probate decides which routes are open to you. There are two.

Full authority. Full authority includes every power the Independent Administration of Estates Act grants, Probate Code section 10402. Section 10503 then lets you sell real property at public auction or by private sale, at the price and on the terms you decide, without the rules that govern court-confirmed sales. There is no published notice of sale, no court approval of the commission, no 90 percent floor and no court review of whether the sale is necessary. In their place is the Notice of Proposed Action, which has to state the price and the commission and go to the heirs and beneficiaries at least 15 days before the sale can go ahead.

Limited authority. Section 10403 takes four powers out of limited authority. Selling real property is the first. The others are exchanging real property, granting an option to buy it and borrowing against it. With limited authority, the court has to confirm a sale of the building.

Court confirmation. This is the route with limited authority, with no independent administration authority at all, and whenever someone who received a Notice of Proposed Action objects to the sale. Probate Code section 10308 requires a sale on this route to be reported to the court and confirmed before title passes, even when the will directs or authorizes the sale. The confirmation hearing is where the 90 percent rule in section 10309 applies and where other buyers can overbid.

The two routes produce different sales. Under full authority the buyer negotiates with you and waits out a notice period. In a confirmed sale the buyer negotiates with you, waits for a hearing and can be outbid there. The details are on two pages of this guide: full versus limited authority and the Notice of Proposed Action, and court confirmation and overbidding in Los Angeles County.

How is the price set?

Pricing starts with the inventory and appraisal. Within four months after letters are first issued, the personal representative files an inventory and appraisal of the estate's assets with the court. The appraisal is made by the personal representative, the probate referee or another appraiser, as the Probate Code provides, section 8900. The personal representative delivers the inventory to the probate referee the court designated, with the data the referee needs, section 8902. The State Controller appoints probate referees for each county, and the court designates one from that list, section 8920.

The referee is paid a commission set by statute. Probate Code section 8961 sets it at one tenth of one percent of the value the referee appraises, and section 8963 sets a minimum of $75 and a maximum of $10,000 per estate unless the court allows more. If the property the referee appraises totals $2,000,000, the commission is $2,000.

In a court-confirmed sale, the appraisal becomes a hard floor. Section 10309 bars confirming a private sale for less than 90 percent of the appraised value, and the appraisal must have been made within one year before the confirmation hearing. With an appraisal of $2,400,000, the lowest price the court can confirm is $2,160,000. If the case has been open long enough that the appraisal will be more than a year old by the hearing, raise it with the estate's attorney before you set a list price.

Under full authority, section 10503 removes the 90 percent rule. What remains is the Notice of Proposed Action. Section 10585 requires it to state the sale price, so each heir or beneficiary who receives it can hold that price up against the appraisal on file and object if it looks low.

None of these rules tells you what the building will sell for. That comes from the market, meaning the rent roll, what the leases and the rent rules allow, the building's condition, and recent sales of comparable buildings nearby. Shaya Lowenstein can build that analysis for the listing. The appraisal is one input to it, and in a confirmed sale it sets the lowest number the court can accept.

What are buyers agreeing to?

A buyer in a probate sale is dealing with a personal representative who may never have lived in the building or managed it. Expect the buyer to rely on inspections, the leases and the rent roll rather than on anything the estate can say from memory. Plan to price and market the building in its present condition, and to give buyers access to inspect before they commit.

Beyond that, the two routes ask different things of a buyer.

• Court confirmation. The buyer signs a contract that can still be topped at the hearing. They wait through the notice periods and the court's calendar, and they can lose the building to an overbidder in the courtroom. In practice, conditional offers are generally not accepted in a confirmed sale, so buyers finish their inspections and line up financing before the hearing. That is how the process usually runs, and the estate's attorney can tell you what the assigned department expects.
• Full authority. Under section 10503 the terms are whatever you and the buyer agree, so ordinary inspection and loan contingencies are possible. The buyer's extra wait is the notice period, and the contract should say what happens if an objection sends the sale to court.

In both, the buyer is taking the building with its tenants.

Tenants and rent control stay with the building

A probate sale does not change which rent rules apply. In the City of Los Angeles, the Rent Stabilization Ordinance covers rental units with a certificate of occupancy issued on or before October 1, 1978. That test is about the building, so a new owner does not change it. Most city rentals the RSO does not cover fall under the Just Cause Ordinance once a tenant has lived there six months or the original lease has expired, whichever comes first. Statewide, Civil Code section 1946.2 requires a just cause to end a tenancy after 12 months, and section 1947.12 limits rent increases to 5 percent plus the change in the cost of living, or 10 percent, whichever is lower, until January 1, 2030, with exemptions that include housing under a stricter local rent control.

For RSO units, the allowable increase from July 1, 2026 through June 30, 2027 is 3 percent, under a formula the City amended effective February 2, 2026.

Until closing, the estate collects the rent, keeps the LAHD registration current and answers repair calls. At closing, Civil Code section 1950.5 gives the seller two ways to handle each security deposit. Either transfer what remains after lawful deductions to the buyer and notify the tenant, or return it to the tenant with an accounting. If the seller does neither, the buyer is liable for the deposits along with the seller. Showings need notice too, and section 1954 presumes 24 hours to be reasonable. The details, including estoppel certificates and LAHD registration, are on the page about tenants during a probate sale.

Who approves the agent's commission?

In a court-confirmed sale, the court does. Court approval of the commission is one of the confirmed-sale requirements that section 10503 lists and then lifts for full authority, so it applies whenever the sale goes through the court. The rules are in Probate Code sections 10160 through 10168, and two of them decide the split when an overbid wins.

• If the agents have no agreement between themselves, the commission on the original bid is divided equally between the agent holding the listing contract and the other agent, and if the court confirms the sale at a higher bid, the other agent is paid all of the commission on the difference.
• If the original bidder had no agent and the winning overbidder did, that agent's commission cannot exceed half of the difference between the original bid and the winning bid.

When the court compares the original bid with a higher offer, it does not count any commission owed to an agent, section 10311. The overbid has to win on price.

Under full authority, the commission is a term of the deal that everyone who receives the notice sees. Section 10585 requires the Notice of Proposed Action to state the commission, or the method used to calculate it.

Prop 19, briefly

For transfers on or after February 16, 2021, Proposition 19 limits the parent-child exclusion from reassessment to a family home that was the parent's principal residence and becomes the child's, or a family farm. The Board of Equalization says a rental home passed from parent to child does not qualify, so an heir who keeps an apartment building should generally expect it to be reassessed. When the estate sells the building to an outside buyer, no child ends up owning it, and the exclusion does not come into it. The Board of Equalization's Prop 19 page has the rules.

The sale, step by step

1. Find the will, and work out who petitions, whether the named executor or someone asking to be appointed administrator.
2. The petitioner files the Petition for Probate. Notice is mailed and published, with the first publication at least 15 days before the hearing.
3. The court signs the order for probate, including any full or limited authority. Nothing is signed for the estate until letters issue.
4. Take control of the building: insurance, rent collection, an estate bank account, repairs and the LAHD registration.
5. File the inventory and appraisal with the court within four months after letters. At the same time, file a change of ownership statement for the building with the county recorder or assessor. Mail notice to known creditors within four months after appointment.
6. With the attorney, confirm which route the sale will take, sign a listing agreement, and gather the rent roll, leases and deposit records buyers will ask for.
7. Market the building and accept an offer.
8. Under full authority, give the Notice of Proposed Action at least 15 days before the date it names, and proceed if no objection arrives. On the confirmation route, publish notice of the sale unless the will authorizes the sale, file the report of sale and petition for confirmation, form DE-260, and take the offer to the hearing.
9. Close escrow, and either transfer each security deposit to the buyer with notice to the tenant or return it to the tenant with an accounting. LAHD gives a new owner 45 days after the close of escrow to register the units.
10. Within one year after letters, or 18 months if a federal estate tax return is required, the personal representative petitions for final distribution or files a report on the status of the estate, Probate Code section 12200.

What each step waits on, and which waits the Probate Code fixes, is on the probate sale timeline page.

When should the estate's attorney be involved?

From the start. Shaya is a real estate agent, not an attorney, and a probate sale is a court proceeding. The estate's attorney files the petitions, prepares the notices, answers objections and appears at the hearings. Bring the attorney in before you sign a listing agreement, because its commission terms will be disclosed in a Notice of Proposed Action or put in front of the court. Bring them in again before you accept an offer, and at once if an heir objects, a creditor files a large claim or two heirs want different outcomes. Income tax on the sale and the estate's own returns are questions for a CPA.

Shaya's part is the building. That means what it is likely to sell for, how to market it with tenants in place, which documents buyers will want, and how to present offers so that the attorney and, if it comes to that, the court have what they need. The court's own probate pages and its probate local rules are worth a look before the first hearing.