Managing residential tenancies after the death of a lessor

In the event of the death of a lessor, property managers are often left managing a property with little or no instructions from the lessor’s estate as to the future management of the property. Property managers should ensure that they keep accurate and up to date records of their lessor clients’ emergency contact details in order to prevent lengthy delays in obtaining instructions regarding the management of the property and/or where funds are to be disbursed to.   

Death of a co-lessor/co-owner

Pursuant to Part 3 of the Standard Terms of the Form 18a General Tenancy Agreement, where there is more than one lessor named in a tenancy agreement, they are both/all required to perform all of the lessor’s obligations under the agreement. In circumstances where one lessor is deceased, the other lessor/s are still required to comply with their obligations under the tenancy agreement and pursuant to the Residential Tenancies and Rooming Accommodation Act 2014 (Qld) (the RTRA Act).

Where a deceased person owns a property as a joint tenant with another person, the deceased owner’s interest in the property will be transferred to the surviving owner without the need for the property to be bequeathed to that individual. As such, the property will not fall into the deceased person’s estate and will therefore not vest in the executor or administrator of the deceased lessor. In those circumstances, property managers will need to arrange for the parties to execute a new PO Form 6 in order to continue managing the property.

In order to confirm whether the property is owned as tenants in common or joint tenants, property managers should undertake a title search of the property. They should ensure that they take instructions from the owner(s) listed on the title, or their executor or administrator.

Before taking instructions from an executor or administrator, property managers should ensure that they are provided with sufficient documentary evidence to confirm that the representative is the executor or administrator of the deceased’s lessor’s estate. Property managers may need to seek written confirmation of the executor or administrator from the lessor’s legal representative.

Death of a sole lessor

Where a sole lessor is deceased, any property owned by them will devolve and vest in their executor, and if there is no executor, the Public Trustee, according to section 45 of the Succession Act 1981 (Qld).

Practically, this will mean that the death of a lessor does not bring an end to a tenancy agreement but causes the lessor’s interest in the property (and the lessor’s obligations) to be transferred to the executor or administrator of the lessor’s estate. The executor or administrator is then responsible for managing the sale of the property or its transfer to a beneficiary.

In the circumstances, property managers should ensure that they only deal with the executor or administrator of the lessor’s estate. As set out above, in order to identify the executor or administrator of an estate, property managers may need to seek written confirmation from the lessor’s legal representative.

Where instructions from an executor or administrator are not forthcoming, property managers should hold all trust monies until such time as a confirmed executor or administrator is able to provide written instructions as to where any funds should be disbursed.

If a property is transferred to a beneficiary as a new owner, property managers will need to arrange for a new PO Form 6 appointment to be executed.

Further, where a lessor has provided their own name and address for service (rather than the property manager’s) to the tenant/s of the property pursuant to section 206(1) of the RTRA Act, any change in ownership will need to be notified to the tenant/s of the property within 14 days pursuant to section 206(2) of the RTRA Act.

In circumstances where a sole lessor dies intestate (without a will), or in circumstances where no next of kin applies for letters of administration from the Court to administer the estate, the situation becomes much more difficult for property managers. Whilst the Public Trustee, an executor, or administrator, are legally required to look for relatives of the deceased lessor to inherit the property, this is not always possible, and can often result in lengthy delays between notice of the deceased lessor’s death, locating the relevant executor or administrator of the estate, and the transfer of title to a beneficiary.

In circumstances where a property manager is advised by an unknown party of the lessor’s death, and no executor or administrator comes forward, it would be to obtain any and all available evidence of the lessor’s death and confirm any executor or administrator’s authority to act before entering into any further PO Form 6 appointments, or transferring funds based on that executor or administrator’s instructions. Should the authority of the executor or administrator not be clear, property managers should seek legal advice before acting on any instructions.

Best practice advice for property managers

In order to prevent lengthy delays following the death of a lessor client, property managers should ensure that they obtain an up-to-date and accurate record of their clients’ emergency contact/s (and preferably next of kin) when entering into a PO Form 6 appointment (at Item Q in the current iteration of the Form).

It would also be prudent for property managers to ensure that all PO Form 6 appointments are regularly reviewed and that they periodically check with their lessor clients to confirm that their emergency contacts remain current, their telephone numbers and email addresses are up-to-date and that those individuals remain willing and able to provide instructions in the event of a lessor passing away.

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