"Can Louisiana Heirs Sell a Home Before the Judgment of Possession? What Article 938 Lets Them Sell, and the Title Your Client Receives"

The offer comes in on a Saturday for a brick ranch in Lafayette that belonged to a mother who passed away in the spring. Her three children are ready to sign. The listing agent has a good contract, a client with a pre-approval, and a closing date thirty days out. Nobody has opened the succession at the courthouse yet, and the first question on the phone Monday morning is whether the children can sell the home at all before a judge signs anything.

Yes. Louisiana Civil Code article 938 lets an heir act as owner of their share of an estate until a court appoints someone to run it, so Louisiana heirs can sell before a judgment of possession. The purchaser receives only the title those heirs actually hold, and the lender and title insurer will typically want the notary to show that title is complete before the loan closes.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, including Louisiana, NMLS #483943, through C2 Financial Corporation.

What does Louisiana Civil Code article 938 let an heir do?

The Code uses its own words. Civil Code article 876 says a successor is either an heir, who inherits by law, or a legatee, who inherits under a will. A succession representative is the executor or administrator a court appoints to run the estate. Under Code of Civil Procedure article 3159, that person takes an oath and furnishes any security the law requires, and the clerk then issues letters showing the appointment and the qualification.

Article 938 on the Louisiana Legislature's site has two short paragraphs. The first says that before a succession representative is qualified, a successor may exercise rights of ownership over his interest in a thing of the estate and over his interest in the estate as a whole. The second says that if a successor exercises those rights after a representative is qualified, the effect is subordinate to the administration of the estate.

Put together, the heirs can act as owners of what they inherited until someone is appointed to run the estate, and after that, their acts rank below the work of paying debts and settling it.

The official comments, and what they mean for the purchaser and the lender

The legislature published official comments with the 1997 revision of Louisiana's succession law, in the enrolled 1997 bill, House Bill 1628. Article 938 was amended and reenacted in 2001 (Acts 2001, No. 556), and the comments were published with the 1997 version. Four of them bear directly on a purchase.

• The heirs' signatures count before any judgment. The comments say article 938 recognizes the ownership a successor holds before a formal judgment of possession, and gives a basis for the successor's binding acts as to his own interest.
• Your client receives the heirs' title and nothing more. The comments say a person dealing with a successor acquires the title or interest the successor has. A purchaser from one heir of three receives that heir's share, and a purchaser from all three receives what the three of them hold together.
• An unpaid creditor of the estate can still matter after the sale. The comments say the rights of creditors may supersede those of a purchaser from the successor, if those creditors assert them in time. That is the comment a lender pays the most attention to.
• An appointed representative can still act on the property. The comments say an heir acting on his own interest during an administration does not follow the representative's procedure, such as advertising the sale and getting court approval. Those acts stay subject to the representative's powers.

The comments give an example of that last point. Suppose a representative has been appointed and sells a property to pay the estate's debts. That property has left the estate, so the judgment the court signs later cannot hand it to any heir.

What does a judgment of possession do in Louisiana?

The judgment of possession is the court order at the end of a succession that says who inherited and puts them in charge of what they inherited. Louisiana Code of Civil Procedure article 3061 says the court recognizes the petitioners as heirs, legatees, surviving spouse in community or usufructuary. It sends the heirs and legatees into possession of the property of the person who passed away. A surviving spouse in community is sent into possession of an undivided half of the community property, and the usufruct over the other half where the spouse has it.

A usufruct needs a plain definition before that list makes sense. Civil Code article 535 defines it as a real right of limited duration on the property of another. The person who holds the usufruct is the usufructuary, and the person who holds the ownership underneath it is called the naked owner. The guide to buying a home in Lafayette, Louisiana lists the usufruct among the personal servitudes, which are rights that belong to a person rather than running with the land.

So an heir, a legatee, a surviving spouse who owns half the community, and a usufructuary can all hold a piece of the same home. Article 938 lets the heirs sell before the judgment exists, and the notary and the title examiner work out from the record and the family's documents who holds which piece.

How does a pre-judgment sale close in Louisiana?

The Code allows the sale, and getting it funded depends on what goes into the file. These are the steps that usually come up, in roughly this order.

1. The notary identifies every successor. For your client to receive the whole home, everyone who holds an interest has to sign the act of sale, because a purchaser from some of the heirs receives only their shares. That means the children, any legatee under a will, and a surviving spouse who owns half the community. The Louisiana cash-out refinance page explains why community property follows how a home was acquired, whatever name is on the deed.
2. The notary confirms whether a representative has been qualified. Article 938 treats a sale before qualification differently from one after it. If an executor or administrator is already in office, the effect of the heirs' sale is subordinate to that administration, so where the administration stands matters before anyone signs.
3. The title examiner looks at the estate's debts. The comments say creditors' rights may supersede a purchaser's when timely asserted. A lender and a title insurer will typically ask the notary or title attorney how unpaid debts, taxes and mortgages are being handled before the act is signed.
4. The notary sorts out any usufruct. If anyone holds a usufruct, who signs is the notary's call, and asking about it early gives the notary time to get the answer into the file before closing.
5. The title insurer decides what it will insure. It looks at what the heirs hold and what could still reach the property. Whatever it asks for to issue the policy goes on the closing list.
6. The lender reviews the title work with everything else. Freddie Mac's Guide, section 4201.2, requires a mortgage to be a valid first lien. The property has to be free of prior liens, with no rights or conditions that could give rise to one, apart from the exceptions it lists. A lender reads the succession through that requirement.

The notary still passes the act of sale and the act of mortgage the usual way. Passing an act means it is signed before the notary and two witnesses, and the Louisiana notary article on recording the act of sale covers how both are recorded.

The title the lender and the title insurer are relying on

A lender is lending against the title your client receives, and article 938 says that title is the heirs' title. If every successor signs, no representative is in office, and the estate's debts are handled, the heirs can pass the interests they inherited, and that is what your client receives.

A missing heir keeps a share your client never bought. A creditor who asserts a claim in time can, under the comments, take priority over the purchaser. A representative qualified the week before closing puts the sale under the administration of the estate. The notary and the title examiner can look into each of those from the record before closing.

Because the Code permits the sale, the questions a lender and a title insurer ask are about whether the title is complete. They decide whether to close a particular pre-judgment sale once the title work is in hand.

This article stays with what the Code and its official comments say. How a court would treat a specific sale is a question for a Louisiana attorney.

Mistakes that slow a Louisiana heirs' sale

• Treating the heir who calls as the only seller. The sibling who lives nearby and handles the listing may hold a third of the home. The act of sale needs everyone the title examiner identifies, and your client receives only the shares of those who sign.
• Forgetting the surviving spouse. If the home was community property, article 3061 sends the surviving spouse in community into possession of an undivided half. Leaving that half out of the act leaves it out of your client's title.
• Ordering title work late. Debts, a will, a usufruct and a qualified representative all surface in the title work, and ordering it the week before closing squeezes every answer into a few days.
• Assuming the succession has to be finished first. Article 938 lets the heirs sell before then. The contract does not have to wait on a court date the Code does not require.

An illustration, with the family made up

The family and the figures below are invented to show how the steps fit together.

Ms. Arceneaux owned a home in Lafayette Parish in her own name, as a widow. She passed away in March with no will, survived by three children. Nobody has opened a succession, and no representative has been appointed. The children accept an offer of $285,000 from a client of mine who is financing the purchase.

The title examiner pulls the record and finds her late husband's succession was completed years ago. The examiner also finds a small home-equity line from 2019 still open in her name. The children agree that the line will be paid from the sale proceeds at closing, and the notary gets a payoff letter.

All three children sign the act of sale. No representative has been qualified, so under article 938 they are exercising ownership of their interests before qualification, and the title insurer issues its commitment on that basis. My client's lender reviews the title commitment, the payoff and the appraisal with the rest of the file. The children, my client, two witnesses and the notary sign the act of sale, and my client signs the act of mortgage, on the same afternoon.

If the youngest child had stopped returning calls, the other two could sell only their two-thirds, and the file would wait until that third share was accounted for.

Your next step in Louisiana

If you are an agent or a closing attorney with a family ready to sell, it helps to get the notary started on the title work the day the contract is signed. The Code already lets the heirs sell, so most of the time before closing goes into confirming which family member holds which share.

If your client is the one buying, the Louisiana mortgage page explains how a Louisiana closing works from the notary's side. Your client can get pre-approved for a Louisiana mortgage, and I'm glad to talk through a specific succession file by phone before anyone signs. Outside Louisiana, buying a probate or estate-sale home with a mortgage covers the court-appointed seller.

No pre-approval from anybody is a loan commitment. Final approval depends on the property, the appraisal, the title and underwriting the complete file.

Nothing here is a loan approval, a denial, a commitment to lend, or legal advice. The Civil Code and the Code of Civil Procedure say what they say, and how they apply to a particular succession and a particular act of sale is a question for a Louisiana notary or attorney.

Common questions

Can heirs sell a home in Louisiana before the succession is opened?

Yes. Louisiana Civil Code article 938 provides that before a succession representative is qualified, a successor may exercise rights of ownership over his interest in a thing of the estate and in the estate as a whole. The official 1997 revision comments say the article recognizes a successor's ownership before a formal judgment of possession. Heirs can therefore sign an act of sale for their interests before any judgment is signed.

What title does the purchaser receive from Louisiana heirs before a judgment of possession?

Only the title the heirs hold. The revision comments to Civil Code article 938 say a person dealing with a successor acquires the title or interest the successor has. If every heir and any surviving spouse in community signs, the purchaser receives what they hold together. If one heir does not sign, the purchaser receives only the shares of those who did.

Can a creditor of the estate affect a Louisiana purchase from the heirs?

It can. The official comments to Civil Code article 938 say the rights of creditors may supersede those of a purchaser from the successor if those rights are timely asserted. That is why a lender and a title insurer typically ask how the estate's debts, taxes and mortgages are being handled before the act of sale is signed.

What changes if a succession representative has already been appointed in Louisiana?

The effect of the heirs' sale changes. The second paragraph of Civil Code article 938 says that when a successor exercises ownership after a succession representative is qualified, the effect is subordinate to the administration of the estate. The notary will want to know where the administration stands before an heir signs.

Will a lender finance a home bought from heirs before the judgment of possession in Louisiana?

It can, on the strength of the title work. The lender is lending against the title the heirs pass, so it reviews the title commitment, any payoffs and the identity of every successor. Whether it closes depends on what the notary and title examiner establish.

Does a usufructuary have to sign a Louisiana act of sale from the heirs?

That is a question for the notary handling the sale. Louisiana Code of Civil Procedure article 3061 lists a usufructuary among those a judgment of possession recognizes, so the title examiner will look for one. The answer to who signs depends on the facts of that succession.