What happens to a residential tenancy when a tenant or lessor dies?

Section 277 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (the RTRA Act) sets out the ways in which residential tenancies can end. These include, inter alia,

1. the Lessor and tenant agreeing in writing to end the agreement[1], the Lessor giving the tenant a notice to leave under section 326[2];
2. the tenant giving the Lessor a notice of intention to leave under section 327[3];
3. the tenant giving the Lessor a notice ending the tenancy or the tenant dies (if there is a sole tenant)[4]
4. the tenant vacates, or is removed from, the premises after receiving a notice from a mortgagee or appointed person under section 317[5];
5. the tenant abandons the premises and the period for which the tenant has paid rent has ended[6]; or
6. QCAT makes an order terminating the agreement.[7]

In this article, we look at the processes which must be followed in the event of the death of a tenant or Lessor.

Death of a sole tenant

Pursuant to section 324A of the RTRA Act[8], if a sole tenant dies, their residential tenancy agreement ends on the earlier of the following days:

• 14 days after the tenant's personal representative or relative gives the Lessor written notice that the agreement ends because of the tenant's death;
• 14 days after the Lessor gives the tenant's personal representative or relative written notice that the agreement ends because of the tenant's death;
• the day agreed between the Lessor and the tenant's personal representative or relative; or
• the day decided by QCAT upon an application by the Lessor.

However, if no notice, agreement or application to QCAT is made, the tenancy agreement will end one month after the tenant's death (or 2 days after the tenant's death for a short term moveable dwelling tenancy) [9].

Section 13 of the RTRA Act defines a tenant as including the tenant's personal representative. According to the Acts Interpretation Act 1954 (Qld), a personal representative of a deceased individual means the executor or administrator of the deceased person's estate.

Therefore, before taking instructions from a personal representative of a deceased tenant, 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 tenant's estate. Property managers may need to seek written confirmation of the executor or administrator from the tenant's legal representative.

Where a sole tenant's death is not confirmed, it may be prudent for property managers to consider proceeding under the abandonment procedures set out in Chapter 5, Part 1, Division 8 of the RTRA Act if they apply.

Death of one of multiple tenants

Pursuant to section 244 of the RTRA Act, where there are co-tenants under a tenancy agreement, and one co-tenant dies, the deceased's interest in the tenancy ends and the tenancy agreement continues in force with the remaining co-tenant/s.

A deceased tenant's rights or liabilities (including the rental bond) are not affected by the tenant's death. The deceased tenant's estate will therefore be able to claim the tenant's rental bond.

Pursuant to Part 3 of the Standard Terms of the Form 18a General Tenancy Agreement, parties to a tenancy agreement will automatically be co-tenants unless it is otherwise stipulated that the parties are joint tenants in the special terms of the tenancy agreement.

Death of a sole Lessor

Where a sole Lessor is deceased, any property owned by them[10]will devolve to 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 to deal only 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 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.

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 obligation 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 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 listed on the title, or their executor or administrator, as set out above.

Who is responsible for damage to the property caused by the death of a tenant?

In circumstances where the death of a tenant results in damage to a rental property, property managers should ensure that the personal representative or relative of the deceased person is aware of the damage to the property and the rectification costs.

In circumstances where a tenancy is ongoing after a tenant's death (as set out above), it is likely that the tenant's obligations under the tenancy agreement and section 188 of the RTRA Act will be ongoing, and as such, it may be possible for the Lessor to make a claim on the deceased tenant's estate. However, it would be advisable for a Lessor to inform their landlord's insurer of the circumstances in any event.[11]

References

[1] Residential Tenancies and Rooming Accommodation Act (2008) Qld, s 277 (a).
[2] Ibid s 277 (b).
[3] Ibid s 277 (c).
[4] Ibid s 277 (d).
[5] Ibid s 277 (e).
[6] Ibid s 277 (f).
[7] Ibid 277 (g).
[8] For residential tenancies. See s 387A for rooming accommodation agreements.
[9] Residential Tenancies and Rooming Accommodation Act (2008) Qld, s 324A (2). [
10] Other than property of which the deceased Lessor was trustee.