Where does rent arrears sit in the order of paying creditors?

reg091

Uncle died intestate, my sister and I are the only living relatives. Very small estate (rented flat, less than £3k cash and maybe a few more from selling effects). I very much doubt if there will be sufficient to cover all the debts of the estate.

Advised by two solicitors that there is no need to apply for Letters of Admin so we are just doing it with death certificates.

I have seen online the legal order in which creditors have to be paid and there is no mention of rent arrears. The Housing Association want me to sign a form saying that I will pay the rent due until the property is vacated. This doesn't seem right to me. I thought the estate pays this (not me) and if there is not enough money after paying other creditors higher up the list then they get nothing.

Any advice welcome!

Keep_pedalling

The estate is insolvent, do not try to administer it. You have no responsibility to pay for this. Simply tell them that the estate is insolvent and you are not the administrator.

reg091

Thanks Keep pedalling. So do you think that legally we (my sister and I) are not administrators, we are just choosing to arrange a funeral and could take any heirlooms etc, throw the keys through the letterbox and walk away?

Could we even take anything we wanted (including all cash from bank accounts) pay for the funeral out of that, pocket the rest and not pay any of the outstanding debts? (Because we are not required to legally register for administration so therefore can do what we like?).

Owain_Moneysaver

You cannot take cash from bank accounts, remove anything from the property, or take any other action as
(a) you are not the executor or administrator (yet) and have no legal authority over the estate
(b) if you do intermeddle in the estate you may be held to be the de facto administrator and become personally liable for the rent arrears and other debts if you do not administer the estate in accordance with the law.

If you arrange a funeral you will be responsible for paying for it although the bank may pay the funeral director's bill from funds held.

If you cannot afford to pay for the funeral inform the local council that there is no executor to the estate, the estate may be insolvent, the relatives are unwilling and unable to pay for the funeral, and they will arrange a public health funeral (usually a cremation).

reg091

Thanks Owain Mone. That goes against the advice that I got from two solicitors (independently and without me prompting them) that I do not need to register for Letters of Administration. And that seems born out by statements on Building Society websites that they do need to see Letters of Admin or Probate to release the cash if under £5K. It seems that I (or indeed anyone with a copy of the death certificate) could go into a branch and have them transfer the money to me.

Yorkshireman99

reg091 wrote: »

Thanks Owain Mone. That goes against the advice that I got from two solicitors (independently and without me prompting them) that I do not need to register for Letters of Administration. And that seems born out by statements on Building Society websites that they do need to see Letters of Admin or Probate to release the cash if under £5K. It seems that I (or indeed anyone with a copy of the death certificate) could go into a branch and have them transfer the money to me.

Just to emphasise if you believe the estate is insolvent under no circumstances apply for LOA or try to administrate the estate in any way.

reg091

Confused now!

Everything I have read online about low value estates and not applying for LOA makes no mention of not doing anything with the estate. On the contrary the steps to close bank accounts, pay creditors if you can etc seem to still apply.

Nowhere have I read that not having an LOA means that you cannot adminster the estate.

What options are you suggesting that I have?

Yorkshireman99

reg091 wrote: »

Confused now!

Everything I have read online about low value estates and not applying for LOA makes no mention of not doing anything with the estate. On the contrary the steps to close bank accounts, pay creditors if you can etc seem to still apply.

Nowhere have I read that not having an LOA means that you cannot adminster the estate.

What options are you suggesting that I have?

The bottom line is, and always was , never , ever administer and estate that may be insolvent. This may go against the instict that things must be done. The reality is that LOA or probate my bee needed even for a small estate if any assets are held by an organisation that insists of probate yo release them. There is no one size fits all solution.,

Owain_Moneysaver

You may not need Letters of Administration if you intend to administer the estate.

However, you are being advised here to not become the administrator of an insolvent estate.

Walk away. There are insufficient funds to cover debt, so you're not losing any inheritance, and you are saving yourself a lot of hassle, possible expenses which can't be reclaimed from the estate as there are insufficient funds, and potential personal liability for debts if you administer the estate improperly.

reg091

Thanks Yorkshireman.

So if we do nothing then what happens to our ability to have any family papers/worthless heirlooms etc that we are "entitled" to under the law of intestacy? Do we have to wait until one of the creditors files insolvency proceedings against the estate and then somehow add our names to the list of creditors in the hope that the contents of the flat haven't been disposed of?

Yorkshireman99

reg091 wrote: »

Thanks Yorkshireman.

So if we do nothing then what happens to our ability to have any family papers/worthless heirlooms etc that we are "entitled" to under the law of intestacy? Do we have to wait until one of the creditors files insolvency proceedings against the estate and then somehow add our names to the list of creditors in the hope that the contents of the flat haven't been disposed of?

Essentially yes. You had no authority to remove th estate porperty even thoug it is of low value.