When should a real estate contract be “subject to court approval.”

This post discusses a few situations when the listing agreement and real estate contract must be subject to court approval. The examples listed below are not exhaustive, but provide some insight into the process of obtaining court approval.

Supervised Probate

In Illinois, when a probate estate is opened, the administration of the estate is either supervised or independent.¹When the probate estate is supervised by the court, the Executor or Administrator must get court approval before taking certain actions. For example, in order to sell real estate, the court may require the approval of the listing agreement and real estate contract.

Real Estate Partition

In Illinois, an owner can seek the partition of real estate.² This generally occurs when the owners to the property are in disagreement about the management and care of the property. Either owner may file the lawsuit and utilize real estate attorneys to partition the property. When partitioning real estate, the court has the power to require the sale of the real estate and to partition the proceeds. Under this circumstance, the requesting party should seek court approval of the listing agreement and real estate closing contract. This gives the other party the opportunity to object to either agreement.

Application and Approval

When either of these two situations arise, it is important to set expectations with the client and prospective buyers. The phrase “subject to court approval” must be conspicuously written on the face of the listing agreement and real estate contract. The listing agent should be able to effectively communicate to the selling agent why this condition is being stated on the real estate contract. Once the contract is signed by the parties, a petition is filed with the court seeking court approval.  The timeframe for court approval is about 2 weeks. It may take longer if the other party objects to the real estate contract. In that event, it may take up to 6 weeks for a determination by the court.

The most important take away should be to check with the seller’s attorney on the process and timeframe for obtaining court approval. Transparency about the process is the best way to keep expectations in check.

  1. See 755 ILCS 5/1-2.16 and 755 ILCS 5/28-1, et seq.
  2. See 735 ILCS 5/17-101, et seq.