The role of an executor is to administer a deceased person’s estate in line with the terms of their Will or intestacy provisions. The deceased may often have land or buildings which require to be sold or have the title transferred. This can be more challenging in situations where the deceased is a landlord and property has been let to tenants.
The death of a landlord does not automatically terminate a tenancy and it is often the case that an executor will step into the shoes of the landlord. This can be unfamiliar territory for executors and they should seek legal advice to ensure they comply with their new obligations.
1. Terminating the tenancy
Executor landlords, like any other landlord, need to serve notice to a tenant to terminate a tenancy and to recover possession of a property. The required style of notice (or notices) depends whether the tenancy is a Short Assured or an Assured Tenancy.
The ‘ish’ is the last day of the tenancy agreement. However, tenancies don’t automatically come to an end on the last day. . Proper notice must be given, otherwise the tenancy will automatically continue. If landlords do not serve the proper notices correctly and on time there may be long delays before termination which can have consequences for winding up the estate.
Notice periods can also differ according to the particular terms of a tenancy agreement and it’s easy to be caught out by one or other of the requirements.
If there is a tenancy agreement in force over any of the deceased’s property, executor landlords are strongly advised to seek legal advice on appointment to their role.
2. Compliance with landlord obligations
Executor landlords are under the same duties as any other landlord, but may benefit from some exceptions and allowances in relation to landlord registration and tenancy deposits.
3. Landlord registration
Generally all landlords need to be landlord registered, but there are some exceptions which are linked to the property, not the person. Properties exempt from landlord registration include those held by executors for less than six months from the date of death. However, an executor landlord should be registered for any tenanted property in their possession at the sixth month anniversary of the deceased’s death. This may not be an issue for executors who are in a position to terminate a tenancy and wind up an estate quickly but this is not always guaranteed. Therefore, it’s suggested executor landlords diary forward four months after the date of the deceased’s death to review the position.
Failure to be landlord registered is a criminal offence and subject to a maximum fine of £50,000. Please see Landlord Registration Scotland for further information.
4. Tenancy Deposits
The Tenancy Deposit (Scotland) Regulations 2011 introduced a duty on landlords to secure deposits in an approved scheme and provide tenants with prescribed information. This also applies to tenancies entered into before the Regulations came into force.
Once again, there are some exceptions to the duty to secure a tenancy deposit. Generally, the same exceptions apply to tenancy deposits as they do to landlord registration, so if a tenancy over a property is exempt from landlord registration it may not be necessary to secure the tenancy deposit in respect of that tenancy.
The law is not clear as to whether the exemption in respect of tenancy deposits only applies for six months as it does for landlord registration. It is also unclear as to whether the exemption is restricted to tenancies entered into after the deceased’s death (between the executor landlord and the tenants) or whether it also covers previously existing tenancies in which the deceased’s role as landlord has transferred to the executor. There are currently no reported court cases clarifying the scope of the exemption.
In any event, executor landlords should ensure deposits are secured for both existing and new tenancies to limit any scope for punitive action under the Regulations. A landlord may be fined for up to three times the tenancy deposit for failing to comply with the Regulations.
If you are an executor and would like assistance in your role as a landlord, or in any other matter, please contact us.
