It’s challenging to know what to do when a renter dies. Although this won’t happen very frequently, I have known several landlords, including myself, that have had to deal with this circumstance. The situation is incredibly difficult on the surviving family, and the affected rental property is probably going to be tied up for a while. As a landlord, it can be tough to balance sympathy with practical financial issues. Below I will share a personal example and the lessons I learned.
An Example:
I owned an apartment complex for less than a year when one of the tenants passed away unexpectedly. He was a single man who already lived in the apartment complex when I bought it, so I inherited a lease that wasn’t mine. After another tenant informed me that the man passed away, I realized I had no way of contacting his family. I had talked with the man a few times and he was a super nice guy, but I had no personal details on him besides the fact that he had a son.
A few days after the man passed, his son actually got my phone number from another tenant. When he called me, I had to figure out how to manage my human responsibility and my financial responsibility. A side note—these two elements will always be on a path of collision, and you have to be okay with that.
The son was in his early twenties, and he had no idea what to do with his dad’s belongings. Together, we ended up sitting on the tailgate of my truck to talk through all of his options. From the human perspective, I wanted to offer my advice as a coach and a friend, and from a business perspective, I extended him some grace concerning the property’s timeline.
I advised the son to consult an attorney to figure out how to handle his dad’s assets and outstanding bills. Once he did, he learned that his dad lived with very little debt, so everything else was sorted out pretty quickly.
There were several times where I used my master key to let the son into his dad’s apartment, and I gave him an extra six weeks to figure out what he wanted to do with it. Together, we would sort through his dad’s belongings, and I helped him decide what to do with some of his dad’s assets. For example, his dad had two cars, one of which didn’t run and was set up on blocks. I told the son I would give him two months to decide what he wanted to do with the unused car, and in the end, we sent it to the salvage yard. After sorting everything else out, the son continued on his way with the rest of his dad’s assets.
Six Lessons Learned:
- Build a better system.
We added an emergency contact section to our leases. This way, if something happens, we have a couple people that we are able to notify. Even though this is a small step, it can be a huge difference maker when managing a family’s difficult situation and knowing who to contact to sort out property details.
- Accept the risk of lost income.
When my tenant passed away, his unit became tied up and stopped producing cash flow for a season. As a landlord, I had to be okay with this and understand it was one of the business’s risk factors.
- Consult an attorney.
Attorneys can potentially help you locate a tenant’s relatives, give adequate notices from a legal point of view, and understand the rights of every involved party. For me, an attorney can help outline the rules of a situation, which allows me to navigate the issue with more grace and make good decisions. If nobody knows the rules, there’s bound to be trouble.
- Set aside an emergency fund.
It’s important to have some cash set back for unforeseen circumstances like a tenant passing away. It can be 60-90 days before you’re able to vacate a unit, so it’s helpful to have a few months of payment stored away.
- Property manager and/or landlord contact information needs to be accessible.
It’s a good idea to have some information readily available for your tenants and/or their surviving family members. If you post your contact information somewhere in the house, it can save the trouble of people trying to figure out who to call in the case of a tenant passing.
- Be reasonable with the tenant’s surviving relatives.
Try to view the situation from the family members’ perspectives. Engage them and ask for ways you can help them or fulfill their needs. Be reasonable in your deadlines and requests.
In Summary:
- In a situation where families are grieving, people may not act in a rational way, and that’s okay. The Bible says to mourn with those who mourn, and I think as responsible property owners, we owe it to our tenant’s family to be patient and loving and to give them adequate time to mourn the death of their loved one.
- At some point, you will have to address turning the unit over and dealing with the belongings of the deceased tenant. Again, be patient with your tenant’s family and give them reasonable timelines.
- I would strongly recommend talking to your attorney to best understand how to proceed with fairness and how to be reasonable with all involved parties.
- Keep in mind how you would want to be treated in this type of situation and let that be your guide.