The position of letting agents on the death of the landlord

I have recently been doing some training for Propertymark on ‘Death in Tenancy’.

One point which seemed to surprise delegates was their legal position on the death of their landlord.

The position is that their agency contract will end with the landlord’s death. This means that:

• They will have no authority to deal with the property
• The executors will not be bound by any action they may take, and
• If they agree something with tenants which is not ratified by the executors in due course, they may be liable to the tenants for ‘breach of warranty of authority’.

The tenancy itself will continue and so far as the tenants are concerned, nothing legally will have changed other than the identity of their landlord.

However the identity of their landlord may be a moot point until probate has been granted or (if the landlord died without having made a will) letters of administration obtained.

Pending the grant of probate or letters of administration

Both of these will appoint ‘personal representatives’ who will be the temporary owners of the deceased’s estate (i.e. everything they owned) for the purpose of paying off any debts and then transferring any property over to beneficiaries.

But beneficiaries may not inherit, even if they are given as a beneficiary in the will, if the estate has large debts.  As the property may need to be sold to pay them off.

So letting agents need to be really careful about allowing relatives of the deceased landlord or anyone else claiming to be the ‘new owner’ of the property access to it and, in particular, receipt of the rent.

If it turns out that this person does not inherit the property, then if you have (for example) passed rent over to them, you may be liable to the personal representatives who will want it paid back.

A difficult position

So agents often find themselves in a very difficult position on the death of the landlord, particularly as it can now take many months for probate or letters of administration to be granted.

Your best course of action is to do as little as possible other than collecting the rent and holding it so you can pass it over to the personal representatives in due course. Or continue to pay it into the landlord’s bank account.

If someone claims to be the personal representative – check this carefully and ask to see the grant of probate/lettings of administration and some ID for the person claiming.

Once probate/letters of administration have been granted, the first thing to do is find out if the personal representatives want you to continue to act as agent – and if they do, get a new agency agreement signed up with them.

If you are not sure about anything – seek legal advice from someone experienced in this area of law. For example, JMW Solicitors who you can speak to via our telephone advice service.