There is nothing worse than experiencing the loss of a life. If you know the person or not, nothing is more precious than life. However in this article we take a look at the financial perspective of a landlord’s interest in the event their tenant passes away.
It’s the last thing any landlord wants to think about, but if you are investing in property for the long term, there is a possibility that a tenant may pass away. Handling the death of a tenant can be difficult, stressful and time consuming if not dealt with appropriately.
What you need to know when a tenant passes away:
Here are some points a landlord needs to know so they can manage this situation respectfully and promptly:
- In the event your tenant passes away, there are various legal requirements to adhere too. There are many different estate planning laws in place which also differ from state-to-state in Australia, so speaking with your own solicitor to learn the process, timing and obligations will help you manage the stress of things that generally go beyond your knowledge.
- If the landlord finds the deceased body in the property, you should contact Police immediately. The Police officers will attend to the scene and take care of the situation including contacting family or next-of-kin and taking the body away.
- If they have a sole tenant, make sure their pet is safe and looked after.
- Once you learn your tenant has passed away you should promptly ensure the property is carefully locked and secured making sure no one enters the premises and takes anything.
- Access to the property should only be granted to the deceased’s executor or next-of-kin.
- If you have insurance (which we assume you would), make sure it provides cover for loss of rent and damage costs as these may be applicable and very helpful in this time of need. There are certain things that you should do to communicate and lodge your claim. You should call your insurer immediately to learn what needs to be documented to ensure you will receive the financial benefits needed.
- Maintain good communication with the deceased’s executor or next-of-kin. Remain transparent and available to discuss the situation. As a landlord, you will want to be financially compensated for loss of rent or other potential costs but remember that the person you are speaking with may be grieving for their loss too.
- Each state of Australia has different laws. Ensure you follow the obligations that govern you. Your solicitor can help you understand these laws, while your property manager may also have good experience to help you. These obligations may include:
- Bond collection
- Serving notices
- Termination of leases
- Finalising tenant possessions
- If your tenant passes away, this does not terminate the lease and it does not give the landlord the entitlement to remove the tenant’s contents or to obtain possession of the property. If you had joint tenants, it also does not end the lease. The surviving tenant can continue the lease until expiry, or you may look to negotiate ending the lease if that person wants to leave.
- The contents would be transferred to the deceased’s estate or next-of-kin (if an estate does not exist), but the executor would be responsible to remove the contents and belongings while ensuring the property is clean. This would include the cost for a specialist cleaner if necessary.
- The landlord is still entitled to rent until the lease ends. This can come from the bond or the deceased’s estate.
- Any repairs or damages would still need to be funded by the deceased estate but could also come from the bond.
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While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Apr 2020
