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SOMETIMES landlords find themselves dealing with tragic events which can throw up myriad practical issues to deal with you may not have been expecting.
We hope you will never have to deal with this situation but a tenant passing away is a good example – this can be a very difficult time for the tenant’s family but also for you as a landlord – you still have a mortgage to pay but want to balance your financial needs against your tenant’s family’s needs.
A tenancy does not necessarily end when the tenant dies. What happens will depend on the circumstances of the tenancy and type of Tenancy Agreement.
The Tenancy Agreement is in joint names – The living tenant will acquire the deceased tenant’s share by ‘right of survivorship’. So for example a couple renting a property in joint names on the Tenancy Agreement and one of them dies, it will then belong just to the sole tenant/survivor.
The Tenancy Agreement is a Sole occupier – This would boil down to what type of Tenancy Agreement it is.
- The tenancy is still within its fixed term – The remainder of the fixed term is a property right, the ownership of which will pass to the deceased tenant’s Personal Representatives* as part of the tenant’s ‘estate’ – i.e. everything they owns when they die.
- The tenancy is a periodic ‘statutory’ tenancy – The Rent Act 1977, then The tenancy will pass either to the spouse (if there is one living) or in some circumstances to a member of the tenants family living at the property at the time of death (for full details see The Rent Act 1977)
- The tenancy is a Periodic Assured Tenancy – The Housing Act 1988 states that it will normally pass to the spouse (if any). This will also happen with an Assured Shorthold Tenancy. The landlord can easily end it by serving a Section 21 notice and can also recover possession through the courts under Ground 7. For full details, see The Housing Act 1988.
- If there is no-one eligible to succeed to the tenancy under the ‘succession’ provisions of the Rent Act 1977 or the Housing Act 1988, then the tenancy will, as with a fixed term tenancy, pass to the tenant’s Personal Representatives as part of his estate.
The Rights and Obligations of the ‘personal representatives’
These are pretty much the same as the deceased tenant’s. If there are any rent arrears due to the landlord, these will have to be paid from the deceased tenants estate before any money or assets can be given to beneficiaries.
Personal Representatives are not liable themselves in their personal capacity, for any money. So if a tenant, dies with no assets and owing £1,000 rent arrears, the landlord will get nothing.
It is not the personal representatives debt however, they may lose their inheritance as the £1,000 rent will have to be paid to the landlord before they can take anything.
It is important to realise, particularly if there are any assets in the tenant’s estate, that the tenancy will not necessarily be ended just by telling the landlord that the tenant has died and handing the keys back.
If the fixed term has not yet ended, then rent will still fall due on a month-by-month (or for a weekly tenancy, week by week) basis. Normally however the landlord will agree to take the property back, even if the fixed term still has a while to run, so they can re-let the property.
If the tenancy is a periodic one, then the Personal Representatives will be able to serve a notice to quit on the landlord and end the tenancy that way.
How can the landlord end the tenancy?
The landlord will normally want to take the property back and re-let it, however they do not have the right to just do this, unless this is with agreement with the tenant’s Personal Representatives.
How to end the tenancy is it is ‘periodic’ – the landlord will need to serve notice on the Personal Representatives. If they do not agree to give up possession, the landlord will need to obtain a possession order through the courts.
- For an Assured Shorthold Tenancy they should serve a Section 21 notice
- For an Assured Tenancy a Section 8 notice citing Ground 7 needs to be served
- For a Common Law / Unregulated Tenancy Notice to Quit should be served
How to end a Fixed Term tenancy
The landlord will have no real right to end the tenancy unless the rent is not paid. If this happens then Ground 8 will apply – or will be able to forfeit for non payment of rent if it is an unregulated tenancy.
What if there are no personal representatives?
If there is no-one able to deal with the administration of the tenants estate after their death, then an official called ‘The Official Solicitor and Public Trustee’ has the authority to deal with this.
So if the landlord wants to serve a notice, they will be able to serve it on the Official Trustee.
Unless the property is a particularly desirable address with generous lease terms, in reality most relatives will probably be glad of an offer to simply terminate the lease to let the landlord get on with renting it out again – after all, it is one less thing for them to worry about.
Our experts are on hand to help advise you in these difficult circumstances so if you would like to talk about what to do, call on 01243 788257, visit our office in West Street, Chichester or email the team on email@example.com