Death at a rental: what you need to know

If you’re a landlord or property manager, handling the death of a tenant at a rental can be difficult and stressful – and a sensitive issue to navigate. How would you respond if you encountered this situation?

Aside from the emotional toll that dealing with a deceased tenant can cause, there are often costs involved, which can stretch into the thousands of dollars and might not be able to be recouped from the bond or estate. Depending on the policy, landlords may be able to claim on their insurance to cover lost rental income, damage, repairs, cleaning and costs associated with re-letting the property.  

In an ideal world, you would never be confronted with the death of a tenant at your rental. But if you are, you need to know what to do. As well as the sensitivities of liaising with distressed and grieving family members, it’s important to understand your legal obligations and what financial ramifications you may face. So while we hope you never have to deal with the passing of a tenant, we trust these tips will be useful if you do.

Discovery

As unpleasant as the thought may be, the fact is, landlords and property managers often discover the deceased tenant (especially if the tenant lived alone) when they are chasing up unpaid rent, unanswered messages or responding to calls from concerned neighbours.

If you suspect that something has happened to the tenant, contact the police and request they undertake a welfare check.

If you are the one to find the body, leave the property (trying not to disturb anything) and contact the police immediately. The police will handle formalities like contacting next-of-kin and removing the deceased from the premises.

Secure the premises

Once the police return the premises to you, or when you’re notified of a sole tenant’s passing, attend the property and make sure it’s properly secured. Take a video of the property and its condition upon your entrance (documenting tenant possessions and state of the home). If the tenant lived at the property alone, ensure any pets are taken care of. You should only provide access to the deceased’s executor and not allow anyone else to enter the property or remove anything.

Contact your insurer

Get in touch with the insurer and confirm the cover available. Unlike EBM RentCover, some insurance providers don’t cover damage costs or loss of rent as a result of tenant death, so it’s important to check the policy inclusions and exclusions. The insurance provider will guide you through the claims process.

Liaise with executor or next of kin

When appropriate, open lines of communication with the deceased’s executor (a person or institution appointed to carry out the terms of the will) or next of kin. While it may be difficult to negotiate issues like clearing out possessions or ending the lease, it needs to be done so that financial losses can be minimised (and it needs to be done in line with state or territory legislation).

Legal matters

It’s incredibly important that you understand and follow the rules in your state around handling tenant deaths at rentals such as serving notices, terminating leases, returning bonds, disposing of tenant possessions and disclosures. If you do the wrong thing, you could find yourself in legal hot water, which is the last thing you want, on top of an already stressful situation.

Tenancy agreement

One thing that often trips people up is not understanding what happens to the lease when a tenant passes. Some people mistakenly think that, if a sole tenant dies, the tenancy agreement automatically ends – this is simply not the case. The tenancy agreement, like other legal/contractual obligations, passes to the deceased’s executor. This means that they are responsible for the tenant’s obligations under the lease such as paying the rent. If the executor does not want to continue renting the property, you need to follow your state’s procedure for ending the lease and returning the bond.

If a co-tenant dies (joint tenant), this doesn’t end the lease either and the remaining tenant(s) can continue with the tenancy agreement, or you can negotiate ending the lease if they don’t wish to stay on.

Possession and possessions

The landlord doesn’t have the right to immediately take possession of the property. The deceased’s executor takes on their rights and responsibilities, so they must be provided with access to the premises. The executor is responsible for returning vacant possession, dealing with the tenant’s possessions and arranging cleaning of the property (including any specialist cleaning required).

The bond can be used to pay for repairs and cleaning to return the property to its original condition, but the usual bond rules apply.

Landlords also can’t remove the tenant’s belongings. The deceased’s property transfers to their estate or next-of-kin, so you must not remove their belongings from the rental as this is the executor’s responsibility. If there is no next-of-kin, you need to follow your state’s procedures for dealing with abandoned tenant property.

Re-letting

Once vacant possession is returned, the property can be advertised for rent. It’s important to keep written evidence of the advertising activity including dates listed, costs and commencement date of the new agreement, as this will be needed when it comes time to submit an insurance claim.

At EBM RentCover, we work with clients to minimise the emotional and financial stress associated with making an insurance claim. Our Expert Care team is on hand to provide guidance during difficult times such as dealing with the death of a tenant. Please contact us on 1800 661 662.

*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 need us we are here, contact 1800 661 662 if you have any questions.