With the winter period upon us and temperatures beginning to cool down, now is the time to consider what to do if you are dealing with an estate administration where the deceased has left an unoccupied property as part of their estate.
Is the property secure?
This may sound obvious, however, it is very important to ensure the property is well secured, with all doors and windows locked with the key kept safe preferably with the Executor as they are responsible for the property but if they are not close to the property this may need to be a trusted friend or relative.
Is the correct home insurance in place?
If you are an Executor, you must consider the deceased’s home insurance cover. The executor has a duty to protect the assets of the estate, which will include any property. Therefore appropriate insurance must be arranged and in place during the administration of the estate. It is important that this is one of the first calls the executor makes when dealing with the administration of the estate to ensure the insurance company is aware the person has died especially if the property is empty to ensure the policy remains valid. The executor would be criticised for not doing so if there was later an issue with the property and the insurance company refused to pay out as they were not made aware of the change of circumstances.
Most insurance policies only allow for a property to be empty for 30 days. When someone dies leaving an unoccupied property, usually the 30 day limit is no longer suitable, given how long it can take to obtain probate and sell the property. Therefore it is typically necessary to take out a specific unoccupied insurance policy for the unoccupied property, and with this there will be new requirements to meet to prepare the property for winter. For example, it may be a requirement to drain the property of water and to switch off the water at the mains in order to prevent the water pipes from freezing and potentially bursting. Another example, if the property benefits from central heating, might be that the property is heated continuously but at a low temperature of 12-15C (53-59F).
Often failure to adhere to these conditions will invalidate the home insurance policy. The insurer will then not pay out any claims if the property is subject to any damage during the winter period which is typically from November to March.
Therefore the first thing to look at on obtaining the new policy documents is to review the policy and arrange the necessary maintenance of the property so you, and the deceased’s estate, are protected.
Why do insurers treat unoccupied properties differently?
If a property is unoccupied, it is exposed to more risks which would often be dealt with more quickly by someone living at the property. Whether it be minor issues such as leaks or damp which may develop into much more serious issues when nobody is around to discover them, or more severe threats such as burglaries, vandalism or squatters. Home insurers therefore treat unoccupied properties with more caution, due to the increased risk in insuring these homes. This increased risk usually results in higher insurance premiums to pay. The additional premium can be paid from the estate. However if the funds are not available at the time it needs to be paid then the executor or a beneficiary will need to pay the premium and be reimbursed from the estate in due course.
I am an Executor, should I visit the unoccupied property?
It is in the interests of both the Executor and the estate to visit the property, or if you are not able to do so then you should arrange for the property to be visited by from a trusted neighbour, friend, relative or a contractor. This is because it ensures the insurance requirements are complied with and it demonstrates that you are fulfilling your duty in protecting the asset of the deceased’s estate. It ensures any issues with the property are likely to be spotted early and dealt with promptly, which can result in fewer problems down the line.
How do I maintain the property during winter?
Whether you have drained down the property of water or kept the central heating running, it will be a good idea to keep the property in good condition, especially if the property is to be sold. A clean and well maintained property will often garner more interest at auction and may result in higher asking prices. Executors are also responsible for sorting through the possessions held in the property and dealing with them in accordance with the Will and so a tidy and well maintained property will make this process easier. It is also important to note that any costs directly incurred for the maintenance of the property may also be claimed and payable from the estate.
By Nicola Hawkins, Associate Wills and Estates Solicitor at Irwin Mitchell.