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Topic
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My friend Jacqui owns an investment flat which she has rented out for some time to a good tenant. Sadly, the tenant died suddenly and unexpectedly on 20 April 2017. An autopsy was required but there are no suspicious circumstances and the tenant did not die in the property.
A direct debit payment of 2 weeks’ rent in advance would have been due on 21 April, but naturally the tenant’s bank immediately froze her account and the payment didn’t go through. So Jacqui’s rental income effectively ceased the day after the tenant’s death.
Jacqui sympathises with the grieving family, but is now losing rental payments, on which she relies for her own living expenses, because the family of the deceased has been slow to clear the tenant’s possessions out of the flat.
After some delay, Jacqui received the rental bond, which was enough to cover 4 weeks’ rent, up to 17 May. There is no bond money now remaining.
Without consulting Jacqui, the managing agent unilaterally gave the tenant’s family until 3 June to clear the flat – an extra 17 days rent-free. Jacqui has been denied access to the flat until 5 June. So the process of finding another tenant cannot start until at least 19 days after the expiry of rent paid, and if damage needs to be repaired or cleaning done, Jacqui will face at least 3 weeks and probably longer without rental income, for no reason that she has caused.
Is there any way Jacqui can reclaim lost rental for what may be 4 weeks or more, a significant loss, either from the managing agent or from the estate of the deceased when her will is eventually executed?
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This happened when my son died and his bank accounts frozen, unfortunate landlord had to wait for probate to be paid.
ArthurBaker – From my understanding … the Agent had no authority to make this decision on your friend’s behalf. The only excuse that the Agent may have is if your friend was not able to be contacted at the time of the event. However, even if that proved to be true the period for goods collection is usually 14 days.
The property was effectively being used to store the deceased’s goods until the collection of the goods by the deceased’s family or friends therefore it is reasonable that an ‘occupation fee’ be charged i.e. a day’s rent for each day that the goods are stored on your property. The estate of the deceased tenant should be responsible for the payment of the outstanding rent.
Your friend may need to speak to someone from the Office of Fair Trading and/or seek assistance from NCAT if the Agent does not reimburse your friend for their unauthorised decision, or your friend is unable to be reimbursed for loss of rent from the estate of the deceased person.
See this link to the correct process for collection and/or disposition of goods, and any fees that may be charged.
Some advice from Your Investment Property Magazine:
What you should do in the event of a tenant’s death
- Check whether you have a current landlord’s insurance policy
- Clarify the insurance provisions to determine whether rent arrears and future rent loss are covered in the event of a tenant’s death
- In cooperation with the family, remove the tenant’s belongings
- Clean the property, with the aid of professional cleaners if necessary
- Source a copy of the tenant’s death certificate – insurance companies will require a copy of this, which might not be available until at least four weeks after the tenant’s death and can be sourced from the deceased person’s family
- Landlords who are unable to obtain a copy of the death certificate should contact their insurance company for further advice. Some insurers might accept a death notice from the newspaper in lieu of a death certificate
- Begin advertising the vacancy as soon as is feasible, keeping written evidence of the advertising activity to assist with the insurance claim
- When the property has been re-let, submit an insurance claim with relevant supporting documentation
- Act with care and sensitivity.
See below for what is required for a termination notice when a tenant dies:
RESIDENTIAL TENANCIES ACT 2010 – SECT 108
Death of tenant
108 Death of tenant
(1) On the death of the sole tenant under a residential tenancy agreement, either the landlord or the legal personal representative of the tenant may give a termination notice to the other person.
(2) The termination notice may specify a termination date that is before the end of any fixed term of the residential tenancy agreement if it is a fixed term agreement.
(3) The Tribunal may, on application by a landlord or the legal personal representative of the deceased tenant, make a termination order if it is satisfied that a termination notice was given in accordance with this section and that vacant possession of the residential premises has not been given as required by the notice.
(4) The legal personal representative of a deceased tenant who is given a termination notice by the landlord may give vacant possession of the residential premises at any time before the termination date specified in the termination notice.
(5) The estate of the deceased tenant is not liable to pay any rent for any period after the legal personal representative gives vacant possession of the residential premises and before the termination date.
As I was the Executor of my sons estate, I made sure the landlord was paid in full up to the day Probate was granted – Probate went through quickly – I had also cleared the house and had it cleaned so the landlord was able to rent again day after Probate was granted.
The legal the legal personal representative ie the executor or administrator is responsible for the deceased so debts. Find out who the lpr is and lodge a notice of a debt. You will be paid out ahead of any distribution, if there is one.
i suspect that if the deceased was renting, then they probably had few assets.
your insurance company will require you to go this route before considering any claim you make on them.