How To Handle The Deaths Of Unit Owners: Steps To Take

Although it is an unfortunate situation, it happens at every Association. When an owner passes away, it is often unclear how to handle the situation. Often times, Board Members are torn between wanting to be sympathetic to the family of the deceased and trying to rectify any delinquency or maintenance issues.

When an owner passes away, make sure it stays on your radar, and is brought to the attention of the property manager and/or attorney. If there was debt due at the time of death, the Association only has six months from the date of death to serve or file a formal claim against the decedent’s estate through the executor or administrator of the Estate.

If no executor or administrator has been appointed, the Association, within the six month timeframe, as a creditor, has the option of becoming the administrator of the Estate. If the Association chooses to become the administrator of the Estate, it must be fairly certain that there will be assets and the Estate is not insolvent. Often times, if there any viable assets, there will be a family member willing to take on the task of opening the Estate. When no one files, it is often the case that there are no assets, just headaches.

For the Association, opening an estate with no assets will do little but accumulate court costs and attorneys fees, and will often not solve the main problem, which is disposition of the property, or selling it to a new, paying owner. But claims are barred if no administrator or executor comes forward within six months of the date of death.

At that point, the Association’s option is to file foreclosure as usual against a non-paying owner. This is often more cost effective and mechanically desirable for an Association when dealing with an Estate when no heirs have yet come forward.

One issue is that often times, however, the account does not go delinquent until after the owner has passed away. When this is the case, the Association does not have an ordinary claim against the Estate—it is more tailored to an administrative expense of Estate.

Also, keep in mind any property maintenance issues. If the heirs have decided to walk away from the property, have they cleaned out the property yet? Some heirs will take what they think is valuable and leave the rest. The last thing the Association wants to discover is that there was a fridge full of food, and the electric has been turned off; or that the lender never winterized the property, subsequently leading to pipes bursting and affecting other adjoining units.

More on Community Associations