What Happens if a sole tenant dies? Your Legal obligations on unexpected tenant deaths
O*NO! The sole tenant in your property has unexpectedly passed away – do you know what you need to do?
Running a successful real estate agency requires more than just knowledge of property markets and customer service skills. It demands preparedness for the unexpected, including unforeseen events like the death of a tenant. Dealing with the death of a sole tenant isn't something we often consider, but it's crucial to understand the regulations set by state and territory laws. This will allow you to have operation procedures and policies in place for when the need arises, so you and your team know how to handle it legally.
In this blog post, we'll give a quick rundown of what happens across some parts of Australia.
What happens in Queensland?
In QLD a residential tenancy agreement will end if the tenant dies.
The agreement ends on whichever happens earliest:
14 days after the tenants relative/representative gives you written notice to end the agreement because the tenant has died; or
14 days after the lessor/landlord gives the tenants relative/representative written notice of the agreement ending because of the tenants death; or
On a day agreed to by the tenants relative/representative and the lessor; or
If the lessor takes the matter to the tribunal, then the day decided by the tribunal.
If notice isn’t given then, the tenancy will automatically end 1 month after the tenants death, unless it was a short term tenancy, in which case, it will end 2 days after the tenants death.
Who is responsible for cleaning out the premises or fixing damage caused after the tenants death? Under the Residential Tenancies and Rooming Accommodation Act 2008 (QLD) the term ‘tenant’ includes the tenant’s personal representative, which will include the executor/administrator of the tenants estate. A tenant’s general legal obligation is at the end of the lease is to return the property and its contents in the same condition as when they moved in, except for normal wear and tear. Whilst not explicitly stated, this will, in practice, extend to the representative of the tenant.
For more see: Residential Tenancies and Rooming Accommodation Act 2008 (QLD)
What happens in New South Wales?
Unlike QLD, in NSW the death of a sole tenant will not end the tenancy agreement. Legally, either the lessor or the representative, which also includes the executor/administrator, of the deceased tenant must give the other party a notice to terminate. The representative can then give vacant possession of the premises to the landlord on or before the termination date given in the notice. The representative will only be liable for rent payment until they give vacant possession to the landlord.
If things don't go as planned, for example, if the representative doesn't vacate by the termination date, the landlord can apply to NCAT (NSW Civil and Administrative Tribunal) to make an order to end the lease and gain possession.
For more see: Residential Tenancies Act 2010 No 42 (NSW)
What happens in Victoria?
When a renter passes away, the residential rental agreement comes to an end at the soonest of several possible dates. These include the termination date specified in the notice given by the renter to vacate the property, the termination date specified in the notice issued by the landlord, the termination date stated in a Tribunal order, or on the date agreed to by the landlord and representative/relative of the deceased tenant.
In the case of a fixed term tenancy, the representative/relative of the deceased tenant can give the landlord, or vice versa, a notice of their intention to vacate the premises before the end date in the agreement.
If you cannot locate the tenant’s representative/relative, then you can apply to the Tribunal for an order to terminate the agreement, and if required, for possession.
The representative/relative of the deceased tenant do not have to pay rent from the time vacant possession is given.
For more see: Residential Tenancies Act 1997 (Vic)
What happens in Western Australia?
In WA, under the Residential Tenancies Act, the tenancy agreement ends if the sole tenant dies. The executor/administrator of the deceased tenant can sign for the return of the security bond.
According to REIWA, the estate of the deceased will not have to pay any rent from the date of the tenant’s death. The property manager should then work with the tenants representative to vacate the premises, so the landlord can find a new tenant.
However, if there is another person living at the premises, they can apply to the Magistrates Court to be recognised as a tenant. This often comes into play if the partner or other relatives of the tenant are living at the residence. Generally, the lessor will grant consent for this party to become the tenant without having to go to court.
For more see: Residential Tenancies Act 1987 (WA)
What happens in the Australian Capital Territory?
Surprisingly, there are no rules for what to do when a sole tenant dies in the ACT.
According to REIACT, in practice, when a tenant passes away, the tenancy agreement comes to an end upon discovery of their death. The tenant's representative, whether it's their executor or next of kin, will notify the landlord and coordinate the process of vacating the property by tidying up and removing belongings. Once the landlord has control of the property again, the tenancy is officially over. If the tenant doesn't have a representative, the landlord can turn to ACAT (Australian Capital Territory Civil and Administrative Tribunal) to request a termination and possession order. In this case, the landlord will take care of clearing out the property and storing the tenant's belongings until their estate arranges for their retrieval. The estate will cover the costs associated with this service as compensation to the landlord.
It is important to note that this is not a legal requirement, just what is observed in practice.
What can you do to be prepared for the death of a sole tenant?
Here are some tips to ensure your agency is equipped to handle unexpected situations effectively:
Understanding Applicable Laws: First and foremost, it's crucial to have a firm grasp of the laws and regulations that apply to your area of operation. These include tenancy laws, property management regulations, and any relevant legislation concerning estate matters.
Training Staff: Providing comprehensive training to your team ensures they are equipped to handle a variety of scenarios, including sensitive situations like the death of a tenant. Training should cover legal obligations, communication protocols, and compassionate handling of delicate matters.
Workplace Policies and Processes: Establishing clear workplace policies and processes is essential for maintaining efficiency and consistency within your agency. This includes protocols for responding to emergencies, handling tenant disputes, and managing property transitions. By documenting these policies and regularly reviewing them with your team, you can minimise confusion and ensure that everyone understands their role in different situations.
Key Takeaways
The death of a sole tenant is something that can happen, and to ensure your agency handles it effectively and legally, you need to be prepared for the unexpected.
The laws for how a sole tenant must be dealt are governed under state/territory laws. Though these laws also prescribe similar rules, there are minor differences, and it is best you have a good understanding of the laws that apply to your area of operation.
Be proactive, not reactive to these situations: Understand the applicable laws in your state/territory, provide training for staff so they know how to handle these situations without jeopardising their licence or reputation, and keep workplace policies in place so you’re all prepared.
Your Next Steps
Whether it be dealing with tenant deaths, licensing requirements, employment queries, shareholder disputes, or rent roll transactions - We’re here to help you navigate the complexities of real estate agency law.
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.