How to Handle Rental Property

Rental property situations fall into two categories: the deceased was a tenant (renter), or the deceased was a landlord (property owner). Each requires different steps.

If the deceased was a tenant, notify the landlord in writing that the tenant has passed away. In most states, a lease does not automatically terminate upon the tenant's death — the estate remains responsible for rent through the end of the lease term. However, many landlords will agree to an early termination given the circumstances, especially if the unit can be re-rented quickly. Some states have specific laws that allow early termination of a deceased tenant's lease. Negotiate with the landlord for the earliest possible termination date. You will need to clear out the apartment — remove personal belongings, clean the unit, and return the keys. The security deposit should be refunded to the estate minus any legitimate deductions for damages or unpaid rent.

If the deceased was a landlord, notify tenants promptly that the property ownership has changed and tell them where to send rent payments going forward (to the estate account controlled by the executor). Tenants may be anxious about their housing situation, so communicate clearly that their leases remain valid and their tenancy is secure. Identify any property management company or individuals who handle maintenance and repairs, and ensure they continue providing services. Collect all lease agreements, security deposit records, property insurance policies, and mortgage documents. If the deceased managed the properties personally, you may need to hire a property management company (typically 8 to 12 percent of monthly rent) to handle day-to-day management until the estate decides whether to keep or sell the properties.