The New York Times runs a regular column where people can write in and have their real estate questions answered by an expert. In a recent such column, titled “A Noisy Cafe Next Door,” an elderly woman wrote and asked whether her daughter would be responsible for a recently signed lease if the writer passed away during the term of the lease.
The expert’s opinion? The woman’s estate would owe on the lease and need to make regular payments. However, New York law does provide that the tenant’s estate can attempt to find a new tenant which the landlord must accept if reasonable.
This is fairly standard for any contract that you sign, and a lease is a form of contract. Unless the terms of the contract state that it terminates upon death, then the person’s estate is normally responsible for that contract.
Naturally, there are exceptions, such as when a contract would be impossible to perform after one of the parties passes away. For example, a contract for a celebrity to make a personal appearance would be impossible to perform if the celebrity passed away.
One thing to note, however, is that like New York, many states do have special provisions in the law regarding how to handle post-death leases. Before paying on a lease, an estate administrator should consult with an estate planning attorney in his or her jurisdictions to see how local law applies.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning. However, proper estate planning is not a do-it-yourself project. Why not call us for a complimentary consultation at 757-259-0707.
Reference: New York Times (September 19, 2015) “A Noisy Cafe Next Door,”