By Steven M. Williams, Esq.
On May 27, 2010, Pennsylvania State Representative Stanley E. Saylor (R-York) introduced House Bill (HB) 2545, which proposes to amend the Pennsylvania Landlord and Tenant Act by declaring that "the estate of a deceased tenant shall not be liable for any rent that accrues on and after the date of the tenant's death." This provision would apply "whether or not notification of the tenant's death was given to the landlord."
Rep. Saylor introduced HB 2545 apparently in response to several "nightmare situations" in which the landlords of his constituents evidently would not release deceased tenants' estates from residential leases. It is clear, however, that HB 2545 does not attempt to apportion losses between estates and landlords; rather HB 2545 requires a landlord to shoulder all of the loss.
HB 2545 conflicts with well-established law holding that estates are bound to contracts into which the decedent has entered. For example, an estate is obligated to continue making payments on a car loan and on a home mortgage, and must continue to pay its utilities. Nevertheless, without providing a rationale why leases should be treated differently than other estate obligations, HB 2545 would allow estates to avoid lease obligations.
HB 2545 also does not account for the substantial costs that landlords can incur when a tenant dies in the leasehold. For example, if the tenant's death is not discovered immediately, which is a frequent occurrence, a landlord can expend thousands of dollars cleaning and sanitizing the apartment before re-renting it. Under HB 2545, a landlord would be precluded from recovering rent losses during this period. In addition, deceased tenant's heirs frequently fail to remove belongings from an apartment in a timely manner, again causing substantial rental losses. HB 2545 also would bar recovery of such related costs, again without explaining why a landlord should be obligated to suffer such losses. If HB 2545 becomes law, a flurry of litigation challenging its constitutionality will occur.
Finally, to the extent that the purpose of HB 2545 is to protect heirs from the lease obligations of the decedent, HB 2545 ignores the fact that heirs are not personally liable for an estate's debts. It is the estate that is responsible to pay such debts. If an estate does not have sufficient assets to pay its debts, its heirs cannot be forced to pay out of their own pockets (except to the extent that heirs may have taken assets out of the estate).
HB 2545 has been referred to the State House Committee on Urban Affairs, where it currently remains under consideration. Cohen Seglias will continue to monitor the progress of this pending legislation and update you on any new developments.
Steven M. Williams is a partner in the Harrisburg office of Cohen Seglias and a member of the firm's Business Law Group. He concentrates his practice in the areas of landlord and tenant law, real estate and employment law. Steve can be reached at (717) 234-5530 or firstname.lastname@example.org.