Unfortunately, it’s not uncommon for a self-storage operator to learn one of his tenants has passed away. This is often discovered when rent hasn’t been paid and late or lien notices are sent to the tenant’s last known address. It’s at this point relatives and friends may come forward seeking to access the unit, hoping to retrieve the deceased’s property.
There are a couple of different scenarios that can play out in these circumstances. Based on the facts, a self-storage operator has a few legal options for how to respond.
Access Code and Keys
If a family member has the access code and keys to the unit (meaning he needs no action from the manager to enter the space), he can access the unit and, if warranted, remove the property from the rented space. This type of access is analogous to that for any rental property; a family member or friend who previously had access rights doesn’t immediately lose those rights when the tenant dies.
However, it’s important to clarify that this permitted access is only possible when the self-storage manager isn’t involved in providing gate-code access or cutting the lock. If the facility operator is interested in addressing this possible situation right when the tenant moves in, he can add an addendum to the rental agreement that specifically lists the party who has access rights upon death of the tenant.
If the family member does not have authorized access, the facility manager can’t allow that person into the unit. To gain access, the family member must provide the manager with copies of the death certificate and a court order stating that the family member been appointed as the administrator or executor of the estate. (This process can be quick or take up to 60 days.) Once he provides these documents, the family member can access the unit and decide if he wants to continue renting in the name of the tenant’s estate or terminate the rental agreement and remove the items. In either case, he must continue to pay rent on the unit to avoid foreclosure.
Options for Small Estates
If the deceased tenant had a small estate value ($15,000 to $150,000, depending on the state), the family may be able to obtain and prepare a Small Estate Affidavit or process the estate through a Summary Administration. A Small Estate Affidavit is a sworn document, signed by the family member, stating that the amount of the deceased estate is so low that it’s not going to be probated through the courts. Unfortunately, it’s only available in about 20 states.
Once the family member provides the affidavit, the self-storage manager can give him access to the unit. The language of the affidavit must provide, under oath, that there are no competing claims being made by others concerning the property and the party signing the affidavit indemnifies the storage facility if a competing claim arises. In some states, the document must be filed with the court, with an order issued to verify the facts.
Another method of resolution for small estates is the filing of a Summary Administration. Although this process is handled through the probate courts, the timeline is shortened based on the fact that the estate value is small. The decision to use a Small Estate Affidavit or Summary Administration is based on the value of the estate. In some states, if the value is $10,000 or less, an affidavit can be used; if it’s over that amount, a Summary Administration is required.
No Response from Family or Friends
If a self-storage operator learns a tenant has passed away but isn’t notified by a family member, he should try to reach the emergency contacts listed on the rental agreement. He should also contact the local probate court to see if the tenant’s estate has been probated (and an executor named).
If there’s an executor, the manager can contact that person to determine what to do with the unit. Ultimately, if he’s unsuccessful in making contact with those listed on the rental agreement, or any relatives or friends who might be willing to resolve the tenant’s default, he may then send a certified letter to the tenant’s last known address and proceed with the foreclosure process. Depending on the state, there may be a waiting period to allow the estate to be probated before the sale can occur.
Notice of Competing Claims to the Stored Property
There are instances when the facility operator learns a tenant has died and receives calls or visits from multiple family members, each making a claim to the unit contents. In this case, it’s important that he overlock the unit and instruct the family to go to the probate court and submit their claims there, understanding the court will issue a determination as to a rightful heir and proper party to take possession of the property.
Until that time, the facility operator can continue to charge rent. It’s expected that those making a claim will pay to avoid the enforcement of the lien over the contents.
The Debt of the Estate
When it comes to tenant death, self-storage managers need to keep a few basic issues in mind. Most important, just because a tenant has died doesn’t mean his obligation to creditors has also ceased to exist. Someone has to pay rent on the storage unit or the unit will eventually go into foreclosure.
But if the manager knows the tenant has died, it makes sense for him to do what he can with phone calls, letters and even a visit to the local probate court to see if anyone has stepped forward to take over the estate, especially before proceeding with a foreclosure. Lastly, if a resolution is being attempted, the storage operator should delay any enforcement of his lien rights, since the estate process can sometimes take weeks to complete.
Scott Zucker is a partner in the law firm Weissmann Zucker Euster Morochnik P.C. in Atlanta, where he specializes in business litigation with an emphasis on real estate, landlord-tenant and construction law. He’s a speaker at industry events, author of “Legal Topics in Self Storage: A Sourcebook for Owners and Managers,” and a partner in the Self Storage Legal Network, a subscription-based legal service for storage owners and managers. To reach him, call 404.364.4626; e-mail [email protected].
