Newspaper article The Evening Standard (London, England)

Heaven-Sent Comfort; Landlords Have an Duty to Beneficiaries and Tenants to Write Clear and Up-to-Date Wills, Say Liz Hodgkinson HOMES & PROPERTY

Newspaper article The Evening Standard (London, England)

Heaven-Sent Comfort; Landlords Have an Duty to Beneficiaries and Tenants to Write Clear and Up-to-Date Wills, Say Liz Hodgkinson HOMES & PROPERTY

Article excerpt

Byline: LIZ HODGKINSON

NOBODY thinks about dying when they start to build up a property portfolio. But, it happens, and unless your affairs are in good order, chaos can descend even before the funeral arrangements are made.

I know what I am talking about, because my partner died suddenly, leaving behind four panicky tenants and two bewildered executors.

My co-executor and I had no time to mourn; we had to get to work immediately on administering the estate. The first thing was to reassure the tenants that they were not going to be thrown out instantly onto the street.

Andrew Culverwell of Hamptons International says: "When a landlord dies, all of his obligations pass to the estate, and the executors are empowered to continue or renew the tenancy.

"In general, assured shorthold tenancies can and should run to the end of their terms. Periodic tenancies, where the formal agreements have run out, can be terminated by two months' notice on the part of the landlord, and one month by the tenant. Most landlords don't like periodic tenancies, because they offer little security, but they are certainly a good idea when you have to sell properties in order to pay inheritance tax.

"Mortgages also become the responsibility of the estate, and the executors must ensure that payments continue to be made."

Few people enjoy making a will, but if you are a property investor, on however small a scale, you must do this instantly. Also, it is essential to update the will whenever a new property is added to, or deleted from, the portfolio.

Remember that an out-of-date will is worse than no will.

To make life easier for your executors, you should also make a list of all your investment property addresses, bank account details and names of mortgage providers.

These, along with the tenancy agreements, should be kept with a copy of your will. If the properties are mortgage-free, you should also say where the deeds are kept.

"Talk to your accountant and see a solicitor as soon as your portfolio becomes a business, rather than a sideline or hobby," says Culverwell.

Solicitor Paul Neville, who specialises in inheritance, points out that putting property investments into a company will not enable you to escape inheritance tax. …

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