“What is a Property Manager to do when a tenant dies?”

Note: Advice given herein does not constitute the formation of an attorney-client relationship. Further, any communication with the author may not necessarily be secure or confidential, and merely initiating contact with the attorney does not create an attorney–client relationship.

1st in a multi-part series…. What is a Property Manager to do?

By: Mitzi Hall, The Hill Firm PLLC

   

It happens more than you might think…. You get a phone call from a tenant’s family member or see paramedics rush into one of your units. One of your tenants has passed away! The steps you take in the days afterwards are extremely important. While tenant deaths are not a pleasant thought, it is an issue that should be planned for ahead of time.

In an ideal world, you may never have to deal with the death of a tenant, but if you do, there are certain steps you need to take to make sure that things are handled legally and that both your and your tenant’s interests and property are handled the right way.  When a tenant dies while under an active lease and leaves no surviving adult tenants, landlords can potentially incur serious expenses – and if things are not done correctly, and legally, those expenses can quickly add up.

The basics

Despite what you might think, when a tenant dies the lease remains active. You should always check with your state and local laws about your rights and responsibilities when it comes to managing a deceased tenant’s property.

First and foremost, notify your attorney’s office about the tenant’s death. Many clients do not think to do this, but this small step can keep you from potentially making costly mistakes or possibly even being sued by the deceased tenant’s family! Make sure to remember to be sensitive and professional when dealing with a tenant’s death. Always keep detailed records of any actions you take regarding the property and any contact you have with the executor or family members. As we often advise our clients “document, document, document”!!!

Get written notification of tenant’s death

Make sure to get a written notice about a tenant’s death from next of kin or the executor (if there is a will), so you can start the transition to re-renting and potentially recoup any financial loss.

It should go without saying, but If you discover the deceased body on your property call the police immediately. They will handle contacting the next of kin and direct you on how to obtain a death certificate if there is no next of kin. Once the tenant’s death has been established, you can start working towards getting the unit ready for the next tenancy.

Secure deceased tenant’s property

Make sure the doors and windows are locked. See to it that pets are taken care of. Other than that, do not touch anything unless you absolutely must in order to secure the property. Take someone with you as a witness — or at the very least, use your cell phone to take a video of your entry. In many instances it may be best to change the locks to the unit until you have further information on what to do with the deceased’s property. This prevents unauthorized friends/family members who may have a spare key laying around from rummaging through the deceased belongings or squabbling family members from arguing over who took what from Aunt Edna’s apartment – and turning to you for answers!

What Happens to the Lease?

The deceased tenant’s property, debt, and contracts will transfer to the estate. This means that the lease agreement does not automatically end when a tenant dies. Many times, a landlord can hold an estate accountable for any unpaid rent or other lease obligations. However, a compassionate landlord will work with the family and/or executor to allow them to end the lease and move the deceased tenant’s belongings.

What do I with the tenant’s belongings?

A landlord has no right to simply go in and remove the deceased tenant’s belongings.  You need to work with the family and/or executor to remove the deceased tenant’s belongings. Of course, try to be compassionate about their feelings and what the family is going through. But it can be a tricky balance – protecting your property, protecting the deceased’s property, and following all applicable property and estate laws. Every situation is factually different, so it is advisable to seek legal counsel if you have any questions or concerns. This is especially true if there is no will or named executor.

Set a realistic timeline for the family to remove the belongings and clean the unit.  Anywhere from 2 weeks to 30 days is a good time frame.  You can let the family know that they will be responsible for rent for the amount of time it takes them to clean the unit and return possession back to you.

If there is no next of kin, follow your state’s laws for how to deal with abandoned tenant property, especially regarding a tenant’s death. You may be required to store the property for a specific number of days and then sell the property at auction and return the funds to the state if no next of kin can be found. Again, if you have any questions, seek counsel.

Release to the Rights of Possession

Once the property is cleared and cleaned to your satisfaction, ask the executor/next of kin to sign a “release to the rights of possession” form. Once that is completed, you are then in pretty good shape at that point to go ahead and re-rent the unit.

The Security Deposit

Depending on the terms of your written lease and state law, you may be able to apply the deceased tenant’s security deposit to unpaid rent, property damages beyond normal wear and tear, and cleaning costs. Any unused portion of the deposit should be sent to the deceased tenant’s executor, along with an itemized list of deductions. If the amount of rent, damages and cleaning exceed the total security deposit, you may want to petition the deceased tenant’s estate for compensation.

Knowing the steps to take if you ever have to deal with a tenant’s death can save you potential legal trouble and will help you minimize your costs. Remember to be respectful regarding the death while taking steps to protect yourself and your business.

Have Questions or Just Want to Know More?

You’re welcome to contact the author anytime:    Mitzi Hall mitzi@hillfirmlaw.com 615-815-1758