What happens to my tenants when I die?

FlorayG

I have two rental properties both on BTL mortgages
Assuming I still own them when I die what happens with regard to the tenants? The properties will have to be sold to pay back the money owed the mortgage company
Will the tenants still have to go through the Section 21 process (or whatever replaces it)? I'm just a bit concerned about the hassle my executors might have in getting them to leave so the properties can be marketed and sold

Flugelhorn

one option would be for them to sell them with the tenants in situ

user1977

Not sure what solution you are looking for to make things any easier, other than making sure you sell the properties while you're still alive!

lincroft1710

Nothing will happen to your tenants, they will have a new landlord "Exors of Floray G". What happens after that depends on the terms of your will, the amount of mortgage outstanding and available cash in your estate . 

Keep_pedalling

Have you made a will? 

FlorayG

Keep_pedalling said:

Have you made a will? 

Of course. Everything to be sold and the proceeds divided between my named beneficiaries.
So basically my executors become the landlords and have to go through the process? Because I haven't left the actual property to anyone

Keep_pedalling

FlorayG said:

Keep_pedalling said:

Have you made a will? 

Of course. Everything to be sold and the proceeds divided between my named beneficiaries.
So basically my executors become the landlords and have to go through the process? Because I haven't left the actual property to anyone

Yes your executors will be responsible for the rental properties during administration. Are your executors aware of the responsibilities you will be leaving them? This is a far bigger task than an estate that has to just deal with a home and savings. 

lincroft1710

Your executors will have an unenviable task. If they are still outstanding at the time of your passing, the mortgages will still need to be paid (or deferment arranged until the rentals are sold). All LL obligations will still need to be met. The executors will have to decide whether it is better for the estate for the rentals to be sold with sitting tenants or go through S21 processes (or whatever legislation is in force at the time) to evict the tenants.

kingstreet

Write life cover in trust for your beneficiaries to enable them to repay the mortgages; then they can dispose of the properties as they see fit without the pressure of a lender to repay.

mlz1413

You should have life insurance to cover the mortgages, so they will be paid off on your death.

If you rent via an agent then your executors will advise them of your death and Letting Agent will start the process to end the tenancies. 

Your estate will take time to sell off and all the money collected in before it can be split as per your will.

If you don't use an agent then it will fall to your executors to work with the solicitor holding your Will to get the properties to sale. This could include selling them with sitting tenants if they aren't worried about getting the best price

DullGreyGuy

FlorayG said:

I have two rental properties both on BTL mortgages
Assuming I still own them when I die what happens with regard to the tenants? The properties will have to be sold to pay back the money owed the mortgage company
Will the tenants still have to go through the Section 21 process (or whatever replaces it)? I'm just a bit concerned about the hassle my executors might have in getting them to leave so the properties can be marketed and sold

No, the dead cannot own things, the ownership would pass to the estate until it's disbursed. 

It's one of those things where you see the difference in levels of protection. If you were a sole trader employing a cleaner and gardener then the moment you die they are legally made redundant as their contract of employment with you is frustrated given you no longer legally exist. Tenants however have more protections and will continue to have rights to occupy the property until such time as the estate serves a section 21. Their paying rent may get complex once the bank is informed of your passing and locks your account.