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In today's world of high real estate prices, the property held by an estate is often its most valuable asset. If an estate trustee has not disposed of a deceased's property within three years after the owner's death, Section 9 of Ontario's Estates Administration Act (the "EAA") can automatically vest in the person or people who are beneficially entitled to it.
This automatic vesting does not limit powers conferred on the estate trustee by a will (by virtue of Section 10 of the EAA), and it can be deferred by a registered caution. That said, additional steps are still required in order to reflect the automatic vesting under Section 9 on title.
How these rules play out depends on the status of any caution, the language of the will, and the state of title to the property. This article explains the vesting framework, highlights how courts have prioritized testamentary intent, and addresses key risks when administration extends beyond three years.
Filing a caution
A caution registered under Section 9 defers automatic vesting for three years from the date of its registration. Successive cautions extend the vesting date by three years from the most recent registration. The caution is executed by the estate trustee or administrator and registered on title to the property.
In practice, this mechanism gives trustees additional time to administer or sell real property without the operation of automatic vesting. It may be desirable to prevent vesting where the trustee needs to preserve control to satisfy debts and taxes, avoid co‑ownership complications or disputes among beneficiaries, protect the property from a beneficiary's creditors or imprudent dealings, and ensure an orderly sale or distribution aligned with the estate's administration plan.
Although the EAA does not prescribe an express removal procedure for a Section 9 caution, as Section 9(1) operates subject to the Land Titles Act, beneficiaries or other interested parties may seek directions or court orders to vacate instruments that impede lawful administration or frustrate valid powers in the will.
Testamentary intent
Section 10 of the EAA provides that nothing in Section 9 derogates from the rights of an executor or trustee under a will. Ontario courts have consistently affirmed that clear testamentary intent as expressed in a will is paramount1. Where a will grants the estate trustee an unrestricted power of sale and the discretion to postpone conversion, Section 9 does not curtail those powers merely because three years have elapsed.
The beneficiaries' interests in such a case are in the residue of the estate rather than in a specific parcel of land, and automatic vesting does not operate to strip the trustee of powers conferred by the will. However, in the absence of a will, Section 9's automatic vesting rule applies by default.
For example, in Proudfoot Estate,2 the will specifically devised a farm to the testator's children and expressly carved that land out of the trustees' general power of sale. The court held that Section 9's vesting applied to the specifically devised farm after three years, consistent with the testator's intent as expressed in the will. By contrast, in Marcy,3 the will conferred an unrestricted power of sale over all property and authorized the trustees to sell at such times and in such manner as they saw fit, including postponing conversion.
The court held in Marcy that Section 9 did not apply to vest the property in a way that would limit those powers, notwithstanding that more than three years had passed, as the will's provisions were paramount.
The principle that emerges is straightforward—if real property forms part of the general residue and the will includes an explicit or implied power of sale and a power to postpone conversion, the vesting provisions of s9do not apply to limit the trustee. Conversely, where property is specifically devised and excluded from the sale power, powers of the estate trustee are not identified or if a will does not exist, Section 9 can operate to vest that property in the devisees after three years.
What happens if an estate trustee is appointed after the three-year period has elapsed?
If the will grants an unrestricted power of sale and the power to postpone conversion, Section 9 does not cut off those powers simply because three years have passed or because the trustee was appointed later. Marcy illustrates this point.
In that case, the court upheld a sale of property where an independent trustee was appointed seven years after death because the will clearly empowered the trustee to sell at such times and in such manner as the trustee saw fit. Section 9 did not operate to defeat that testamentary authority as expressed in the will.
This outcome underscores the primacy of the will. The timing of the trustee's appointment does not, by itself, alter the analysis when the will clearly authorizes sale and postponement. The automatic vesting rule yields to such powers under Section 10.
What happens if an estate trustee completes a real estate transaction after the three‑year period and the property has vested, even though no powers have been granted or testamentary intent has been expressed in the will?
Although legal ownership may have vested in the persons beneficially entitled by operation of Section 9, registered title will not immediately reflect the vesting, and further registration steps or a court order may be required to perfect title.
In cases where the will is silent or unclear and no caution was registered, a trustee's conveyance after three years may be vulnerable to challenge because the beneficiaries' interests have vested. Ontario case law squarely addressing that precise scenario is sparse, but the author expects that outcomes will likely turn on the specific terms of the will, the presence or absence of a caution, and the surrounding facts.
The practical risk posed by this scenario is real. If a trustee purports to sell after three years without clear testamentary authority or a caution in place, beneficiaries may seek to set aside the transfer or to reopen the estate, particularly where their vested interests were bypassed. Conveyancing lawyers who do not account for Section 9, do not review or correctly interpret the will's powers, or overlook the registration mechanics of the Land Titles Act, face material exposure. In uncertain cases, trustees and lawyers should consider seeking directions from the court.
How we can help
Every estate and real estate matter is fact‑specific. The interaction between Section 9's default vesting, cautions, the terms of the will, and the mechanics of registered title can produce outcomes that differ sharply from intuition. Clear drafting that reflects testamentary intent in a will can avert many disputes. Timely use of a Section 9 caution can preserve flexibility during administration.
Our Private Client Services Group and our Real Estate Group regularly advise estate trustees and beneficiaries on these issues and coordinate the necessary land registry steps to ensure clean conveyancing and tax‑efficient outcomes.
Footnotes
1. 909403 Ontario Ltd. et al. v. Di Michele, 2014 ONCA 261
2. Re, 1994. O.J. No. 704. (Proudfoot Estate)
3. Marcy v. Marcy, 2023 ONSC 5499 (Marcy)
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