Rent arrears after death: Can a landlord claim against the estate?

Naturally, having to deal with the death of a tenant can become very stressful. Not only is it an extremely sensitive period, but knowing what to do to ensure you remain legally sound is another aspect that landlords will need to take into consideration. There are complex legal and financial realities that you will need to face. So, what happens when a tenant dies? Can a landlord recover rent arrears after death? 

There are specific procedures that need to be implemented when it comes to rent arrears after the death of a tenant and gaining possession of the property. Here, we’ll take a look at the different liabilities in a situation where there are rent arrears after the death of a tenant, as well as how to manage your property, both legally and respectfully. 

Does the Tenancy Automatically End When a Tenant Dies?

One of the biggest things to remember is that the tenancy does not automatically end when the tenant dies. No matter what type of tenancy the tenant had, it continues to exist as a contractual entity. 

So, because the tenancy continues to exist, rent continues to accrue every week or month. The legal rights and responsibilities of the tenant will pass into limbo until they are formally handled by an executor, a public official, or an administrator. Who then becomes responsible for paying the rent arrears?

Can You Claim Rent Arrears After Death From the Tenant’s Family?

No, you cannot claim the rent arrears after the death of a tenant from their family. It is vital to remember that any relatives or next of kin are not legally liable for the deceased tenant’s rent arrears because they are related to them. 

However, if a family member was named a joint tenant on the agreement or acted as a legally bound guarantor, this would be a different situation, and they would be financially liable for the rent arrears after death. Attempting to recover the debts from family members who aren’t named as a joint tenant will cross the line into unlawful harassment under the Protection from Eviction Act. (gov.uk)

Claiming Against the Deceased Tenant’s Estate

The liability for existing rent arrears after death will be passed to the estate of the deceased tenant. The estate of the tenant includes everything that the tenant owned at the time of their death, which includes bank accounts, savings, vehicles, personal belongings, and any property. So, how you would go about making a claim against the estate will completely depend on whether or not the tenant left a valid will. Let’s look at the two different scenarios. 

Scenario A: The Tenant Left a Will (Testate)

One or more executors would have been appointed by the tenant if they left a will. The executor, then, is the person who is legally authorised to manage the property and finances of the deceased tenant. 

• To be able to gain access to the rent arrears, you’ll need to submit a formal claim directly to the executor. 
• Next, the executor will look at the debts of the estate and pay you out of the available funds from the deceased tenant. This will take place during the probate process. 

Scenario B: The Tenant Died Without a Will (Intestate)

If, however, the tenant dies without having a will in place, or if they left a will without having a named executor, this is known as intestacy. 

• If this is the case, both the tenant and the estate’s liabilities will be passed onto the Public Trustee, who is a government official who protects estates until an administrator is officially appointed. 
• As the landlord, you’ll need to submit your financial claim for the rent arrears after the death of the tenant to the Public Trustee or to the court-appointed administrator. This can take place once the Letters of Administration are granted to the next of kin. 

What Happens If There Are Insufficient Funds?

If there are insufficient funds available, you won’t be able to recover the rent arrears after the death of a tenant. So, if a tenant passes away with £500 to their name, but they owe you £2,000, the estate will be considered insolvent. You’ll receive the £500, and the remaining £1,500 will need to be written off as bad debt. Again, you won’t be able to pursue the family for the debt.

Joint Tenancies and Survivorship

If, however, the property was let under a joint tenancy rather than a sole tenancy, the rules are different. You’ll need to be able to distinguish the difference between situations where standard succession is involved and sole tenancies. When a joint tenant passes away, the legal principle of survivorship will automatically apply. 

English law states that joint tenants are jointly and severally liable for the tenancy, which means the following: 

1. The surviving tenant of a joint tenancy will automatically become fully responsible for the tenancy
2. The tenancy won’t be passed onto the deceased’s estate or to the Public Trustee.
3. This means that the surviving tenant automatically becomes responsible for all the rent owed to you, as well as the rent moving forward. This also includes any debt that was accumulated before the tenant died. 

Now, you won’t need to worry about navigating probate or having to contact executors so that you’re able to make sure your rental income is protected. 

How to Reclaim Possession When a Tenant Dies Intestate

As you may realise, recovering rent arrears after the death of a tenant is only half the battle. You’ll also need to know what happens when a tenant dies when it comes to the physical property. You’ll need to make sure that you regain possession of the property in the correct and legal way. 

Also, if there is an executor, you’ll be able to mutually agree upon a Deed of Surrender so that the tenancy can be terminated early. This will give the family the time they’ll need to clear the property out and return the keys on an agreed date. 

If the tenant, however, died intestate (this means without an executor or will), guidance from the government dictates that there is a strict statutory procedure that needs to be implemented in order to reclaim possession of the property through the Public Trustee. Here’s how the process works: 

1. Serve a Notice to Quit: Write a formal Notice to Quit and send it to the executor. 
2. Deliver to the Property: Deliver the document to the property itself. 
3. Register with the Public Trustee: Thirdly, you’ll need to send a copy of the notice, as well as a completed NL1 Form, to the Public Trustee Office. 
4. Pay the Fee: There is a fee included in this registration that needs to be paid. 

Once the Public Trustee successfully registers the application, the tenancy will be lawfully terminated. You’ll now be legally free to prepare and market your property for the next tenancy agreement or for sale. 

By making sure that you follow these processes and procedures and by being sensitive towards the family of the tenant who has died, you’ll be able to make sure that your property and rental income are protected and that the needs of all parties involved are taken care of. 

Are you looking for landlord insurance to help protect your rental property? Be sure to get in touch with our team of specialists for a quote today on 01788 818 670, or you can visit our advice centre for more information on how to manage your rental property.