A tenant of yours has passed away — what do you need to do?

Finding out that your tenant has passed is upsetting for a multitude of reasons, but understanding your role as a landlord is important to protecting your interests and your property. As with all aspects of real estate, being educated on both local and state laws will help you navigate the best course of action. In this article I share some best practices as well as give you advice on how to handle these tricky situations.

What does the Landlord/Tenant Act Require:

Prior to 2017 — under the Landlord and Tenant Act of 1951 — Pennsylvania’s “death penalty” allowed landlords the to ability to keep the deceased tenant’s possessions and put liability on the tenant’s estate to pay rent, penalties, and fees for the remainder of the lease term. This means that if a tenant passed away two-months in to a year-long lease, their estate would be responsible for the remaining 10 months.

Pennsylvania has since amended Act 116 — giving the estate the ability to limit how much rent they have to pay back and terminate the lease, so long as the administrator of the deceased provides a written notice. All of this is contingent on a two important points:

• the deceased was the only leased tenant in the property — otherwise, possessions would stay with the other leased tenants and the lease would remain valid

• the lease is a residential lease

The estate can terminate the lease upon the written 14 day notice to the landlord on the latter of:

• The last day of the second calendar month that follows the calendar month in which the tenant dies; or

• Upon surrender of the rental unit and removal of all of the tenant's personal property.

This wording is a little confusing, so here’s an example to help you better understand:

Let’s says John Q. Tenant signs a one-year lease with you on April 1, 2021 as the sole tenant of your property — no one else is on the lease or living there. On May 15, 2021, John dies. On June 10, 2021 the administrator of John’s estate hands the landlord a written notice stating that John’s lease will terminate on June 30, 2021. The administrator removes all of John’s possessions from the property and then returns the keys to you prior to the June 30 move-out. The landlord would not be able to collect any rent after the 30th of June pursuant to Act 116.

As the landlord, you could, however, seek reimbursement if any part of the property was damaged in direct connection to John’s death. Additionally, the estate is liable for any debt or damages accrued by the tenant before they passed.

The tenant’s estate is not liable for damages or penalty for breech of lease or inadequate notice as a result of the death.

Words of wisdom - Address the potential death of a tenant in your lease

It’s always better to be proactive than reactive — before you encounter this scenario, you should carve out a spot in your lease to address this issue specifically. In all of my leases I address this section as the law itself, entitled “Landlord and Tenant Act - Death of Tenant Act PL. 968, NO. 116,” and I base this section off of the language used in the law.

This lets the tenant, the estate and their next of kin know what will happen should they pass while under a lease contract. It also protects your rights as the landlord should this ever be a situation you encounter

This is a good time to speak to your legal counsel about modifying your lease terms.

Open The Lines of Communication and the process will be much smoother

As much as a tenant’s passing is inconvenient and upsetting to you, it is unparalleled to what the family of the deceased is experiencing. There is a lot work for families to settle estates after death — acquiring possessions, handling outstanding debt, paying funeral costs, and dealing with grief itself. If you are able, reach out to them, express your condolences and keep the lines of communication open so you can sort out the affairs in terms of the property together. The family will appreciate it, and it could save you a lot of unnecessary hassle if they feel they can openly converse with you about the next steps.

Maintaining ethical, pOsitive Relations is always a win

Because investment real estate is often times a passive income source, landlords can become dissociated from their tenants. You may use a property management company to handle all relations. Have a plan so that you are prepared if this does ever happen and more importantly your proper manager behaves in a way that you feel is the best representation of you.

One last note to consider: If the passing happened inside your unit, you may be challenged with more than getting possession of your unit or property. After death occurs, depending on the manner of death- bodily fluids may leak from the deceased and cause extensive damage to your unit. In many cases a restoration company is required to clean up and decontaminate the unit. In other instances, you may have to contend with pets that now have to be re-homed. Get educated and be prepared is your best defense. Take the time to do both!

This information may not be used as a substitute for legal advice and you should consult your attorney for legal advice if you have any questions relating to this advisor guide.