Friday, November 25, 2016

New Law Addresses Tenant “Death Penalty”

Pennsylvania's Governor Wolf has signed a new law intended to protect the estates of renters who die during the term of a residential lease. The law is Act 116 of 2016 (HB 447).  
It is not unusual for a residential tenant who has a full year lease to die early in the term of the lease. Many rental agreements include a clause that provides that the lease continues for its full term even in the event of the death of the tenant. This can force the deceased tenant’s estate to continue to make lease payments for the balance of a full year lease term, or to pay penalties for terminating it early.   
The new law gives estates the option to limit their financial liability for rent accruing on a residential lease after the second calendar month after a sole tenant dies. The executor or administrator of the tenant’s estate can terminate the lease upon fourteen days' written notice to the landlord on the later of:
(1)  the last day of the second calendar month that immediately follows the calendar month in which the tenant died; or
(2)  upon surrender of the rental unit and removal of all of the tenant's personal property.
The estate is not relieved of liability for rent or any other debt incurred prior to the date of termination of the lease including damages to the premises, and any expenses the landlord may incur as a direct result of the tenant's death.
The new law applies to leases entered into or extended beginning in January 2017 (the effective date of the Act).
Here is an example of how this might work:
On February 1, 2017 John enters into an agreement to rent a residential apartment for a term of one year. John is the only tenant. On March 15th, John dies. On April 10th, the executor of John’s estate gives the landlord written notice that the lease will terminate on April 30th pursuant to Act 116. The executor removes all of John’s personal effects from the unit and returns the keys prior to April 30th.
In this circumstance the landlord would not be entitled to rent for any period after April 30th. The landlord is entitled to the rent through April 30th and could seek reimbursement for any damages to the premises and expenses incurred due to John’s death.   
Should a similar law be enacted to protect the Elderly and Disabled?
A similar bill has been under consideration to protect seniors and the disabled who are forced to move for health reasons. 
HB 975 would allow elderly (age 60 and over) and younger disabled persons to terminate a lease prior to its expiration – without penalty - when they are required to move or are placed in a health care facility due to medical reasons. In addition, this option would apply when an elderly or disabled individual was required to move in with family members for the purpose of receiving long-term care from a home health care agency.
A physician would have to certify that the tenant, due to medical reasons, is unable to continue to live independently in the residential unit. The landlord would have to be given notice sixty days prior to the proposed early termination date.  

HB 975 was passed by the Pennsylvania House on Oct. 26, 2016 by a vote of 160-30. But it did not pass the Senate and will need to be re-introduced in the next legislation session. 

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