Unintended benefits of Autopay

Ok readers. Don’t @ me. Landlords can profit from dead people. The following blog makes a point – from the landlord’s perspective – regarding the benefits of leasing units to tenants using autopay (direct deposit).

Baron previously discussed virtues of rejecting cash or check payments. Instead, the property manager should use EFT (Electronic Funds Transfer) platforms such as Zelle, PayPal or Apple Pay. This suggestion remains valid. However, the new twist for property managers outlines additional benefits when tenants pay their set up their lease payments through automatic withdraws (intended and unintended).

Of course, the benefits to the manager include:

1. Consistency of both timely and accurate deposits
2. The certainty of funds deposits allowing for forecasting
3. Reduction of late/nonpayment notices

For the tenant, the benefits include:

1. Consistent payment without having to take any action. – Especially if more than one party is responsible for the payment.

However, this last point also includes a caveat (which ultimately favors the property owner): in an event where the unit is unnecessary, the payment arrangement continues. And in some cases, it continues without the consent—or knowledge—of the tenant.

In the following story, the tenant quietly died inside his apartment. His automatic direct deposit kept the situation quiet.

Presumably, this instruction to automatically pay every month, rain or shine, was for the convenience of both parties. EFT direct deposits may have been a part of the leasing application. It may also have been something the tenant originated, as the article indicates, his job duties as a government contractor often included prolonged periods of overseas travel. Regardless of the exact reason, the consistent, meticulous execution of these deposits laid the groundwork for a situation, which prevented a timelier announcement of his demise: Three full years to be precise.

(explicit warning) Add into the mix the: (1) tenant’s apartment choice for a remote location inside the building, (2) benign neighbors, (3) the tenant’s reclusive lifestyle and (4) infrequent property inspections, and one could easily imagine the tenant’s smelly, melting corpse remaining noticed indefinitely.

What is most interesting to Baron centers around how each of the above mentioned-factors worked harmoniously to the disadvantage of investigating authority and serving family members. On the other hand, the same mix of factors benefit the landlord. A dead, paying tenant becomes ‘ideal.’

As an epilogue to this event, the property manager would be responsible for a costly make ready in preparation for a future tenant. Deaths happen, and sometimes they will happen inside of a rental. Special cleaning and decontamination must be arranged. Leasing will always be an unsavory affair, and skittishness expressed by future tenants will be a given.

The surviving relatives will likely not seek reimbursement from the property manager – for the three years of back rent — for a lack of prompt notification.

Questions:

Is a legal duty is owed to promptly notify of death to the surviving relatives?

Should a ‘good’ property manager refund the surviving relatives the three years of rent?

Is there a duty to inform the new tenants about leasing a unit in which someone died?

Had the deceased been discovered earlier, the inheritance would have been larger for the tenant’s inheritors. However, as the deceased was well off, and had sufficient funds to cover years of monthly payments from his financial institution, the landlord inadvertently leased to an ideal tenant: causing no problems to the property, treating the neighbors with respect, not contributing to common area wear-and-tear, and paying on time-without prompting — even after his ability enjoy benefits from his leased property.

Of course, Baron welcomes comments and suggestions.