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15 Jan 20

Dealing With The Death of a Tenant

We all know that with life, comes death and like everyone else, tenants are not exempt to the rule. We have experienced several situations over the years, where sole tenants have passed away during the course of a tenancy. This can be an extremely troubling time for the tenants family (if there is one), the landlord, and the property manager who has fostered a relationship with the tenant over time.

If a tenant dies in your rental property, there are a number of implications that you should be prepared for as a landlord.

While landlord insurance can cover you in the event of a tenant's death, different policies offer varying levels of cover. Financial costs vary, depending on the situation. There can be direct costs, in terms of lost rent and clean-ups, and indirect costs if a property is slower to re-lease because of the associated stigma. Most landlord insurance provides some cover if a tenant dies, although the extent varies depending on your insurer. Contact your insurer to ask about your cover and what paperwork is required to make a claim, for example a death certificate or published funeral notice.

If a sole tenant (the only tenant on a lease) or resident dies, the lease ends on the earliest of the following dates:

- 28 Days after the deceased tenant’s legal representative (executor or administrator) or next of kin gives the landlord written notice of the death, or

- 28 Days after the landlord gives the deceased tenant’s legal representative or next of kin written notice to vacate, or

- A date agreed in writing between the landlord and the deceased tenant’s legal representative or next of kin, or

- A date determined by VCAT

 

It is important to consider everyone in this situation, to tread carefully and to treat all parties with respect. The agent is now going through a process of determining who is the actual next of kin and trying to work with them towards a quick resolution. In many cases, this is not always a straightforward process and we must work our way through it. Generally, we will organise a meeting with the person nominated by the next of kin to discuss plans for vacating the property, offer them contacts for firms who might be able to help pack, sort and store possessions until the family is ready to deal with them.

In turn, we will work with them in relation to appropriate inspection times for the property to be released (if possible).

Whilst the above portion of the process is being dealt with, we have found that landlords are not receiving funds and of course this can put many investors under financial burden. Unfortunately, this burden does not alter the process that must be followed and we must be ensure that we are tactful, sensitive and compassionate in all dealings with the tenant’s family and friends. If the deceased tenant or resident was the only person registered to the bond, the Residential Tenancies Bond Authority (RTBA) will require:

- Bond claim form or tenant transfer form, completed and signed by both the landlord and the deceased tenant’s legal representative or next of kin, and

- Proof of death. Acceptable documents include a full death certificate, an interim death certificate issued by the coroner, an invoice from the funeral director, or a probate or letters of administration, and

- Statutory Declaration from the deceased tenant’s legal representative or next of kin. The person who signed the bond claim or tenant transfer form on behalf of the deceased tenant must sign the Statutory Declaration by legal representative or next of kin

 

This can all take substantial time in some instances. If the tenant’s legal representative or next of kin cannot agree with the landlord on the division of the bond, either party may apply to VCAT for a determination.

If police are involved for any reason, we must liaise with the officer in charge of the investigation as to when access can be expected. This can depend on the individual circumstances of the case and we are completely guided by the police in this instance. Again, this can be a lengthy process sometimes but one that requires the utmost sensitivity and discretion.

Only once the property is vacated, can it be cleaned. This may take specialist assistance in some cases. Be sure to keep all receipts and records to assist in your landlord insurance claim. Once complete, we can re-advertise it for lease however certain circumstances require us to disclose the situation at all inspections to prospective tenants.

Thankfully, this is not our most common issue in property management, but it can and does happen.

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