When a landlord passes away, tenants may be unsure whether they can stay in the property or where to pay their rent. The family may also need to decide whether to keep the property, move into it or sell.
Before anyone changes the rental arrangements, they need to establish who is authorised to act on behalf of the deceased estate and what the existing lease allows. Here is what tenants and families need to know.
Does the Lease Still Apply?
Unless there is a clause specifically stating that the lease will terminate on the death of either of the parties, the binding rental agreement will continue. Even with this clause in place, the tenant will still need to be given a reasonable amount of time to find alternative accommodation.
The rights and obligations created by the lease agreement will bind the deceased’s estate. The tenant must continue paying rent and following the lease conditions. The landlord’s responsibilities, including agreed maintenance obligations, pass to the deceased estate.
A clause dealing specifically with the landlord’s death will need to be checked before assuming that the lease has ended or the tenant is given notice to vacate. Its wording and the applicable law need to be considered.
Who Takes Over from the Landlord?
This is usually handled by an executor - the person formally appointed by the Master of the High Court to deal with the landlord’s estate. The estate includes the property, money and debts left behind. In some estates, an authorised representative is appointed instead.
Being nominated as executor in a will is not the same as having been formally appointed.
A spouse or child may be due to inherit the property, but this does not automatically give them permission to sign a lease or instruct the managing agent on behalf of the estate. Their authority must first be confirmed.
For a rental property, the executor’s responsibilities include overseeing the property and accounting for the rental income and expenses while the estate is being administered. They may appoint an agent to assist, but remain responsible for the estate.
Who Should Receive the Rent?
Rental income owed to the estate must be properly accounted for through the estate’s administration – in order to wind up the estate. A family member cannot simply redirect that income into their personal account because they expect to inherit the property. Payment instructions need to come from someone with the necessary authority.
For example, the deceased’s bank may freeze their account once it has been notified of the death and received the required documentation. The tenant may then get a message from the landlord’s surviving spouse asking for the next rental payment to be made into a different account. The request may be genuine, but the tenant should still ask for written confirmation from the appointed executor or authorised managing agent before changing the payment details.
Verify any new banking details through a known contact number, rather than relying only on an email or WhatsApp message. If the usual rental payment cannot be made, contact the managing agent or executor before the next payment is due. Tenants should not simply stop paying while waiting for someone to contact you.
Can the Family Ask the Tenant to Leave?
An existing lease generally continues after the landlord’s death, with the deceased estate taking over the landlord’s rights and obligations.
For example, if the tenant has six months remaining on a fixed-term lease, the beneficiaries cannot simply ask the tenant to leave because they have inherited the property and intend to move in. Any early termination must have a lawful basis or be agreed between the tenant and someone authorised to represent the estate.
Selling the property also does not automatically end the lease. The buyer generally takes over as landlord when ownership transfers, and a new lease is not required just because the owner changes.
Anyone planning to buy and live in the property should therefore check the existing lease before committing to an occupation date.
What if the Landlord Dies Before Signing a New Lease?
A tenant has been approved and is preparing to move in, but the landlord passes away before the lease document is signed. The family wants the rental to proceed, and an executor has not yet been appointed.
The first step is to establish what was already agreed. An unsigned document does not always mean there is no binding rental agreement, so the agent or attorney should check the communications and terms agreed before the landlord’s death.
If no binding agreement was concluded, someone with legal authority to represent the estate will need to authorise the new rental. The family’s permission alone is not enough.
The heir/s to the property may ultimately have a right to the property but that right will not be realised until such a time as the estate has been wound-up.
Before moving in, tenants should ask the agent to confirm that both the agreement and the authority to proceed have been checked.
How Does the Rental Agency Help?
At Etchells & Young, we confirm ownership and check who is authorised to act for the estate before accepting instructions to let or manage the property.
We require the official appointment documents, identification and relevant supporting information. This establishes who can sign agreements, approve instructions and confirm rental payment arrangements.
With the necessary authority in place, we can assist with tenant communication, rental administration and maintenance arrangements within our management agreement.
What Can Landlords Prepare in Advance?
Landlords should keep the current lease, deposit records, property expenses and managing agent’s contact details together, and ensure your family knows where to find them.
It is also worth discussing the rental property with the person preparing your will, particularly if your family relies on the rental income to meet monthly expenses.
Having these records available means the executor can establish what is being paid, what expenses need attention and when the lease is due to expire, without having to reconstruct the rental history from bank statements and correspondence.
For tenants and families dealing with a landlord’s death, start by confirming who is authorised to act and reviewing the existing lease. Get advice before changing payment arrangements, signing a new agreement or making plans to move.
This article provides general information. Obtain legal advice about your particular lease and circumstances.
