Death of a Tenant| Australian College Of Professionals
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Death of a Tenant

 

Death

As always, the College received an interesting question from a property manager just this week. Unfortunately, and sadly, it is not an uncommon question. That question is – what happens to a tenancy when a tenant passes away while in a rental tenancy agreement? Specifically, the question this week revolved around what happens to their tenancy and any co-tenants still residing at the property?

In many cases, the death of a co-tenant is going to have an impact on the remaining co-tenant/’s ability to facilitate the weekly rental and it is important they understand what options are available to them. Thankfully this is an area that has been well considered within the Residential Tenancies Act 2010, which specifically sets out the process that should be followed in the event that the tenant was the sole tenant as well as if the tenant was a co-tenant.

In the event that the tenant was a sole tenant, section 108 sets out a very clear process, as follows:

  1. On the death of the sole tenant under a residential tenancy agreement, either the landlord or the legal representative of the tenant may give a termination notice to the other person.
  2. The termination notice may specify a termination date that is before the end of any fixed term of the residential tenancy agreement if it is a fixed term agreement.
  3. The Tribunal may, on application by a landlord or the legal representative of the deceased tenant, make a termination order if it is satisfied that a termination notice was given in accordance with this section and that vacant possession of the residential premises has not been given as required by the notice.
  4. The legal representative of a deceased tenant who is given a termination notice by the landlord may give vacant possession of the residential premises at any time before the termination date specified in the termination notice.
  5. The estate of the deceased tenant is not liable to pay any rent for any period after the legal representative gives vacant possession of the residential premises and before the termination date.

If the tenant was a co-tenant, the surviving co-tenants are given the right to vacate the premises or to continue the tenancy under section 78 of the Act which states:

  1. On the death of a co-tenant leaving one or more other co-tenants under a residential tenancy agreement, the remaining co-tenants may continue the tenancy or give the landlord a termination notice that has a termination date not earlier than 21 days after the date on which the notice is given.
  2. If a tenancy is continued under this section, the remaining co-tenants are taken to be the only tenants under the residential tenancy agreement on and from the death of the deceased tenant.
  3. This section applies whether or not the fixed term of the residential tenancy agreement has ended if it is a fixed term agreement.

Obviously, this is a situation that may be quite sensitive and emotional for any tenant to have to endure and the understanding of both the agent and the landlord are essential in ensuring any co-tenants are given the correct legal information and the time to make an informed decision about which of the options they wish to take. As a property manager, you will obviously also need to consider the viability for the remaining co-tenants to remain in the property from the perspective of affordability.

And remember, there is no penalty (break lease fee) for a co-tenant to break a lease when a co-tenant has passed away.

This would need to be a sensitive conversation with the remaining co-tenants and if it is identified that they will have difficulty in meeting the rent payments, then you will need to obtain instructions from your landlord.

 

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