Tenant death - security deposit

6 Replies

Hi everyone! 

While we were in escrow on our first rental property (duplex), one of our tenants (lived by himself) passed away unexpectedly. It was very emotional to say the least and my husband and I were shocked by the news and also inexperienced on how to handle the situation. Shortly after, we closed and the family took care of cleaning out the unit by the end of that month (rent was already paid for that month) and we were able to re-rent it but it took us another three weeks to find a new tenant. 

Long story, short: My question is regarding the security deposit. The late tenant's lease was supposed to be up at the end of March 2018. Also, we needed to repair some things in the house (cracked window, etc.) but otherwise it was left in clean condition by the family. Can I apply the security deposit towards the three weeks it took us to re-rent the unit and also towards the repairs for the unit? 

Also, would we legally need to notify the family about using the security deposit for repairs/rent and providing them with an itemized list?

Thank you in advance!!

-Olga the Newbie

When someone dies their assets become their "estate".  Someone administers the estate.  Either a executor if there is a will or a personal representative if there is not.  You should go through the same process as if they were still alive and return the explanation letter and remaining deposit, if any, to the executor or PR.  There are often bills left over when someone dies that the estate must deal with.  

Refer to your lease.  There may be language within the lease that addresses a death.  My guess is that you can take out any amount for damages, but cannot deduct for the 3 weeks loss of rent.

In any event, you MUST send a Summary of the Security Deposit showing the disposition of the deposit.  There is usually a deadline for this.  In AZ it is 14 days.  So, you will want to refer to your Landlord Tenant act to find out what the process is in your area.

Pull out your copy of your state landlord tennat regulations and see if there is any referances to "death of a tenant".

Give it back, minus the repair. Likely would have taken you 3 weeks to rent when his lease was up anyway.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.