Until recently, when a tenant died and still had a lease, landlords had two options: Assuming there was no family member with succession rights to the place, the landlord could either consider the lease terminated or they could allow the tenant’s obligation under the lease to transfer to their estate.

If a landlord chose not to consider the lease terminated, the estate either had to pay out the lease’s remainder or petition the landlord to permit the property to be sublet through the end of the lease’s term.

The Estate of the Deceased Tenant Now Has More Power

Under a law recently signed by Governor Kathy Hochul, the tenant’s executor (if they had a will) or personal representative (if they did not and one was appointed by the estate) can now simply cancel the lease by providing the landlord with notice and turning over the keys.

For all practical concerns, this makes it much easier for both the landlord and the tenant’s estate to move on. However, the tenant’s estate can still be held responsible for some of the landlord’s expenses. These include:

• Unpaid rent that the tenant owed before their death
• Rent that was unpaid between the time of the tenant’s death and the time of surrender
• Damages to the apartment or home that are beyond normal “wear and tear”
• Cleaning services and hazard removal services related to the tenant’s death
• The cost of moving and storing the tenant’s belongings, if the landlord had to do so

As a landlord, you may hope to never have to deal with this particular situation – but it’s a distinct possibility. Knowing what to do to comply with the legalities of the situation can be difficult on your own, particularly if there is no will, disputes over the estate or nobody to claim the tenant’s belongings. Seeking experienced legal guidance can help you navigate the situation.

How Does Transfer of the Lease Work?

Historically, under New York Real Property Law § 236, when a tenant passed away during the term of a residential lease, the lease did not automatically terminate. Instead, the executor or administrator of the deceased tenant’s estate had the option to request the landlord’s consent to assign the lease to another party or to sublet the premises. This request had to be accompanied by the written consent of any co-tenant or guarantor associated with the lease. The landlord was then required to respond within a specified timeframe, either granting or reasonably withholding consent. If the landlord unreasonably refused consent or failed to respond, the lease could be deemed terminated, releasing the estate from further obligations.

However, this process often proved cumbersome, leading to potential financial burdens on the deceased tenant’s estate. Recognizing these challenges, New York State introduced a significant amendment to the Real Property Law. Effective February 15, 2024 (under § 236-A) the executor, administrator, or legal representative of a deceased tenant now has the explicit right to terminate the lease upon providing written notice to the landlord and surrendering possession of the premises. This termination is effective as of the date the notice is given and possession is returned.

While this provision allows for the termination of the lease, the estate remains liable for any rent or debts incurred prior to the termination date, including damages to the property and expenses the landlord may incur directly resulting from the tenant’s death.

Can I Name Someone as My Lease Executor Before Death?

While tenants can designate executors in their wills to manage their estates, including lease agreements, it’s essential to understand that lease agreements themselves are contracts between the tenant and the landlord. As such, tenants cannot unilaterally appoint someone to assume their lease obligations without the landlord’s consent. However, tenants can take proactive steps to ensure a smoother transition in the event of their death:

1. Succession Rights: In New York, certain family members residing with the tenant may have succession rights, allowing them to assume the lease upon the tenant’s death. To facilitate this, tenants should inform their landlords in writing about any family members living with them who might be eligible for succession rights. This notification can help prevent disputes and ensure that the landlord is aware of potential successors.
2. Communication with Landlord: Tenants may discuss the possibility of adding a co-tenant or authorized occupant to the lease agreement. This arrangement, subject to the landlord’s approval, can provide the designated individual with legal rights to the premises, ensuring continuity in occupancy.
3. Estate Planning: Including specific instructions in a will regarding the management or termination of lease agreements can provide clear guidance to executors and family members. While the executor will have the authority to manage the deceased’s affairs, clear directives can streamline the process and reduce potential conflicts.

How Much Does It Cost to Transfer the Lease to Another Entity?

Transferring a lease, whether through assignment or subletting, can involve several dependent costs:

1. Administrative Fees: Some landlords may charge fees to cover the administrative expenses associated with processing a lease transfer. These fees can range from $200 to $500, depending on the landlord’s policies and the complexity of the transfer.
2. Legal Expenses: Engaging legal counsel to navigate the transfer process can incur costs. While not always mandatory, legal assistance ensures that the rights and obligations of all parties are adequately addressed, potentially preventing future disputes.
3. Rent and Arrears: The estate is responsible for any unpaid rent up to the effective date of the lease termination or transfer. Ensuring that all dues are settled is crucial to facilitate a smooth transition.
4. Property Maintenance and Repairs: Before transferring or surrendering the lease, the estate may need to address any damages beyond normal wear and tear. Failure to do so could result in deductions from the security deposit or additional charges.

It’s important to note that under the new provisions of § 236-A, while the estate can terminate the lease upon the tenant’s death, it remains liable for obligations incurred before the termination. However, the estate is not liable for penalties related to inadequate notice resulting from terminating the lease under this section.

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