An aging woman posed a question to The New York Times “Ask Real Estate” columnist regarding her rented apartment. The woman asked if her daughter would be responsible for the older woman’s signed lease, if she passed away while still a tenant in the apartment. Her question appeared in a recent column, “A Noisy Cafe Next Door.”
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.
Reference: New York Times (September 19, 2015) “A Noisy Cafe Next Door.”