A Personal Representative must take prudent steps to ensure that real property is kept to a standard that damages to the property are protected against, that if there is the opportunity that the property is utilized for income generation, while it continues to be retained by the estate, and lastly that if the property is to be sold in a timely fashion and steps taken to obtain the highest sale price.
In the case of MacDonald Estate, 2012 ABQB 704, the Personal Representative’s were found to be at fault for not undertaking appropriate oversight of the real property held by the Estate to protect from water damages. Further, they allowed a tenant to live in the property without paying rent when the property could have been rented, which also included liability to the estate of utilities not paid by the renter.
In the case of Laboucane Estate, 2011 ABQB 253, the presence of unnecessary delay by the Personal Representatives in selling real property, resulted in the court rendering a finding that the Personal Representatives were at fault for the mismanagement of the real property of the Estate. to have failed to ensure the sale of the property during the 5 years after the death of the testator.
In MacDonald, as a result of the “neglect or default, if not misconduct” of the Personal Representative, the court held that they were responsible for reimbursing the Estate for the loses that were determined to have occurred as a result of the actions surrounding the real property held by the Estate.
In MacDonald, the actions of the Personal Representatives’ were to such a degree of fault that the court in this case held that costs of having a formal passing of accounts as to the Personal Representatives’ management of assets and expenditures incurred by the estate warranted a finding of solicitor-client costs that were to be payable by the Personal Representatives to the Estate. In this case, as the Personal Representatives were also beneficiaries of the estate, these costs were then deducted from the share that they would receive from the estate.
The accounting of expenditures associated with the repair and maintenance of real property also need to be of a necessary nature. In the case of Vanmaele Estate (Re), 2018 ABQB 840, the court in review of an extensive list of ongoing repairs, replacement and upgrades expenditures reviews each third-party expense and determined whether this was a legitimate expense to be incurred by the Personal Representative of the Estate who was the landlord of the Estate’s real property.
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