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Jul, 2014

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  1. #1

    Default What Happens When Lessor Dies?

    Hi All,

    My Mum currently holds a 15 year lease for a shop. What would happen if the landlord (the freeholder of the shop) was to pass away? Would the lease continue on with whoever inherits the freehold or does the lease become void?

    Any help would be greatly appreciated!

    Regards,
    Will

  2. #2

    Default

    Thank you very much for the response!

    So in short my mums lease is secure for the next 15 years regardless of the landlords mortality?

    I thought that the lease would continue with the heir to the estate. It seems you have confirmed my thoughts!

    Could you please explain "The reversion becomes vested in the personal representatives on behalf of the Estate." as I dont understand what this means!

    My mum would love to buy the freehold now - but the landlord seemms to want to hold onto it so he can pass it to his sons in his will. However, they have already told my mum they would sell it!

    Thanks again for your help!

  3. #3

    Default

    Hi All,

    Can anyone add anything to my original thread and explain the quote i have mentioned?

    I am just looking for some reassurance my mums lease is secure if the landlord (freeholder) passes away.

    I look forward to hearing from sommeone.

    Thanks,
    Will

  4. #4
    Join Date
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    Default

    "Reversion" is a technical term meaning the interest retained after the grant of a tenancy; when the tenancy ends the right to exclusive possession "reverts" to the landlord.

    Just to confirm the answer given above, the death of a landlord does not change anything - apart from who is landlord. The lease continues. This is not something you need to worry about.

  5. #5

    Default

    Quote Originally Posted by wileyb9 View Post
    Hi All,

    Can anyone add anything to my original thread and explain the quote i have mentioned?

    I am just looking for some reassurance my mums lease is secure if the landlord (freeholder) passes away.

    I look forward to hearing from sommeone.

    Thanks,
    Will
    Dont assume anything. Landlords are people, if a Landlord Dies and their children inherit they may want to sell the rented property to get some money in. We had a property where my Father was the landlord. It was worth quite a lot of money but the rent was peanuts.
    But my Father wasent bothered that the rent was peanuts as he had a Civil Service Pension etc. But the Value of the tenanted property added to what he had ment that we had to pay Death Duties (Now Called Inheritance Tax) at 40% so some of the cash he left had to be used to pay the Inheritance Tax leaving the Rented Property as the main asset, and as I said the rent was peanuts.
    At the moment if your landlord dies and whoever inherits they may ask a finantial advisor for advice. At present you are lucky because Interest Rates are ridicously low. If your rented property is say worth £200,000 and brings in £10,000 a year rent that is far better than if the money was invested at todays 3% where it would only bring in £6000.
    But the beneficiaries may not see it that way. They may want their investment cashing in, perhaps enough to move to a bigger house, improve their lifestyle.
    I wont say what we did to remove our tenant but it involved solicitors.
    You should also remember that at the moment with 15 years to go your mother could put the business up for sale, by way of lease assignment, and if your landlord dies and the benificiaries want you out you have lost the opportunity.

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