What happens if my Landlord Dies?
The unfortunate untimely death of a landlord does not need to lead to a great deal of stress for a tenant. The death of a landlord does not terminate your tenancy.
The “tenancy” is a “property” which vests on death in the landlord's executor or personal representatives in the same way as any other asset or “property” of the landlord.
At some time the beneficiary of the original landlord's estate will become the new landlord or lessor. In the unusual situation where there are no heirs, or traceable close relatives, the property will pass to the Crown as ownerless property.
This change in “Landlord” does not affect the fundamental nature of the tenancy or give any persons the right to claim possession of the premises in circumstances other than those which would have applied to the original landlord. For the tenant it means business as usual, at least until the current tenancy expires and becomes due for renewal.
At the expiry of your current tenancy, your new landlord as beneficiary of the original landlords estate may extend or continue the tenancy in the normal pattern. However, any future beneficiary of the landlords estate may need to sell the property in order to pay inheritance taxes (IHT) or in order to split the realisable value between several beneficiaries of the will.
How does the letting agency deal with my landlords death?
Any agency arrangement operates in the same way as a normal contract, and the agency contract may terminate on death of one of the parties, however, the rights of succession may apply and the agency rights may pass to the landlords beneficiary.
An agent will normally, when notified of the landlords demise continue to act as agent of necessity and manage the property until probate has been granted. Any good agent will show patience and understanding throughout this process - which can be protracted.
Once probate has been completed, it is likely that the property will either be sold so that its proceeds can be used and distributed as part of the deceased estate, or the ownership passed to the beneficiary under the terms of the deceased will (or law of intestacy if the former landlord has died intestate). In the event of a sale of the property it will be necessary to issue a notice of possession the tenant. It is not uncommon to instruct the letting agent to give notice to the tenants in preparation for the sale of the property. If the tenancy is for a fixed term, then the tenants will be entitled to remain at the property until the end of the term unless the tenancy agreement contains a break clause.
If there is a new landlord then they are required to notify the tenant of this change to the tenancy in accordance with the Housing Act in writing. The notice should be served on the tenant as soon as possible and 'not later than the next day on which rent is payable under the tenancy or, if that is within two months of the assignment, the end of that period of two months.' For the purpose of compliance with Landlord & Tenant Act, this notice should include an address in at which notices may be served.
Since April 2007, deposits have been protected by statute and therefore consideration will need to be given to the release of the tenant's deposit at the end of the tenancy. In the case of a custodial deposit, the executors will need to authorise the Deposit Protection Service to release the deposit to the tenant, or authorise the agent to so this on their behalf.
Executors may wish to inspect and value the property and any valuable fixtures and fittings remaining in the premises that belong to the landlord. It is important that all such items are listed on your inventory taken when you moved into the property. The executors must seek the tenant's permission to carry out such inspections (on reasonable notice), no items should be removed from the property during the currency of the tenancy without the agreement of the tenant. These items form part of the tenancy and the tenant's right to 'peaceful enjoyment' and any infringement on such tenant’s rights may give cause to a claim by the tenant against the landlords executors.