It is doubtful many part-time property managers consider the possibility of finding a dead tenant when they perform a property inspection. However, this is a very real possibility and has been experienced by most professional property managers at least once in their career.
Report the Death
If your tenant appears to have gone to ground, hasn’t paid rent, isn’t responding to your late notices and doesn’t respond to a knock on the door, you will likely post a notice to enter. Upon entering the property if you discover an unconscious person, and it is not immediately evident that the person is dead, provided you are comfortable with it, Lieutenant Stan Niccolls of the Boise Police Department suggests you check for a pulse. Your next move would be to call 911. In the event the person is dead, which is the most likely scenario when your tenant has not been responding to you for weeks, Lieutenant Niccolls advises exiting the property and waiting by the door for the police to arrive. Be sure not to touch anything and make every effort to prevent anyone else from entering. An unattended death is considered a crime scene until determined otherwise and therefore should be protected from contamination.
Secure the Property
After the body has been removed from the property, which in most cases shouldn’t be much longer than an hour or so, be sure to secure the property so that no one can gain access. It would be advisable to have the locks changed immediately. As the property manager, you could be held responsible for any items that might go missing if friends or family are in possession of a key and take it upon himself or herself to remove items they believe they are entitled to – yes this happens!
Regain Legal Possession of the Premises
With the body removed and the property secured, your next thought will be to return it to rent ready condition and place new tenants as soon as possible. However, a lease agreement does not terminate automatically upon a tenant’s death, (unless your lease specifically states to this effect), so you don’t have a legal right to repossess the property or remove the tenant’s possessions without going through the proper steps. As ironic as this might sound Marc Banner, owner of Realty Management Associates, advises the most efficient take back of the property may be eviction. Even though the lease term is still valid, most landlords are well advised to terminate the rent obligation and cooperate with the tenant’s estate to bring the tenancy to a quick end.
Reassure the Neighbors
If the death has occurred in a multifamily complex, it would be a good idea to speak with the other tenants as soon as possible. News travels fast, and it is better to address neighbors’ concerns before gossip has whipped up hysterical reactions.
Insurance Matters
You will need to obtain a certificate of death for insurance purposes. You will also want to notify your insurance company as soon as possible. Tony Ferguison, of Idaho Select Insurance in Boise, cautions the importance of understanding the difference in “replacement cost” and “actual cash value” coverage in your landlord dwelling policy. If your policy is written for replacement cost, you can expect damage directly attributable to the tenant’s death will be covered minus your deductable. However, if your policy is written for actual cash value, where replacement is necessary, your insurance payout will only cover the depreciated value of the item(s) you are replacing. If your lease agreement had required the tenant to purchase a rental policy with a liability clause, you will also be able to place a claim with the tenant’s insurance company. The tenant’s security deposit can be applied to unpaid rent, damages and any other costs established in the lease agreement. However, in the likely event that the deposit doesn’t cover all the repairs required to return the rental property to an acceptable level of habitability, you will need to work with the executor of the deceased’s estate to cover those costs. You can also file a creditor’s claim if the deceased’s estate is in probate. Communication with the insurance company is key in understanding who is responsible for which actions. Documenting workflow will also be important because your Landlord Dwelling Policy should also cover loss of rent. However, you will need to be able to show an extended period beyond that which is standard in a normal lease turnover. Check with your insurance carrier to be sure you follow protocol for an expedient settlement, and follow your insurance carrier’s requirements carefully because when a tenant dies while under an active lease and leaves no surviving adult tenants, landlords’ will likely incur serious expenses; and if not handled correctly, those expenses can add up very quickly.
Back to Rent-Ready
Once you have legal possession of the property, getting it back to rent ready condition will be your focus. On occasion, a tenant will have no known relatives and no executor. When this situation occurs, landlords are charged with dealing with the courts for a determination on what to do with tenant’s possessions. Landlords are advised never to remove tenant’s belongings on their own without a court order, and should check their local and state laws on the removal of tenant’s belongings to ensure compliance. Where there is an executor of the estate arrangements should be made with that person for the removal of the personal property.
With the personal property removed the next step is clean up. Even in the event of a non-violent death, you are dealing with a toxic site. There could be mild to severe property damage due to body decomposition. Generally with the decomposition of a body, bodily fluids can seep into carpets and bedding. Odors can contaminate the inner mechanics of the HVAC system and even penetrate sheet rock, drapes, blinds and other porous materials. A suicide or accidental death could result in extensive property damage. Potentially the worst possible scenario would be a violent death. Depending on the nature of the crime an entire room, or more, may have to be completely renovated. Needless to say, your usual cleaning crew will most likely not be qualified to handle this type of clean up. A disaster and restoration company, licensed or certified for hazardous waste, will need to be called in. Some states have regulations governing this type of toxic cleanup.
In Review
All of this process can take weeks, even months, requiring many hours of the property manager’s time to resolve. Can that time be compensated? That will depend on the management agreement you have with your client. And for the landlord it will depend on their insurance policy. But aside from the excessive time involved, an equally worrisome aspect is the potential emotional effect on you or your staff. The sight of a violent crime scene, suicide or even a natural death undiscovered for several weeks, can have a lasting emotional effect on the person who unexpectedly stumbles across such a scene, and could require ongoing professional psychotherapy.
It is these less common, but never-the-less not unheard of, situations that occur in property management that point to the wisdom of engaging a qualified professional management team to care for your investment property. Estimate on average a total of 10% of annual rental income, between management and administration fees to employ a quality property management company. A small price to pay to be secure in the knowledge that you have a professional team working on your behalf to care for your investment, and take charge of those unexpected incidences that would otherwise turn your life upside down when they occur.
Credits:
Thank you to Lieutenant Stan Niccolls of the Boise Police Department, Tony Ferguison of Idaho Select Insurance and Marc Banner of Realty Management Associates for contributing content for this Blog.
This Blog piece has been written for the Boise, Idaho market. Laws, regulations and suggested protocol could vary for other regions or states.