Practitioner’s Diary: Removing an Executor From Estate Property
Whilst all clients and cases are unique, certain scenarios will occur numerous times across the course of your career.
This article considers one such situation: where there are multiple executors of an estate, and an estate property is being occupied by one of them (the Occupier) – rent-free and without a basis for occupation.
This introduces a conflict of interest for the Occupier between their role as executor and their self-interest to remain in the property. If this conflict remains unresolved, the Occupier may be in breach of their fiduciary duty, which they owe to beneficiaries.
Occupation of an estate property is problematic because it impedes the administration of an estate, hinders the sale of property (as buyers usually insist on receiving vacant possession) and delays any distributions to beneficiaries. This presents a dilemma not only for the Occupier but also for their co-executors.
If occupation persists and any negotiations to sell or lease the property fail, the co-executors will be provoked into commencing eviction proceedings against the Occupier and removing them as executor.
However, there are a few considerations for the co-executors before an Occupier can be taken to court.
Basics for Occupation
The co-executors will need to gauge facts to establish the Occupier’s right to their occupation of the estate property. This right may arise from:
(i) a Will;
(ii) a Tenancy Agreement;
(iii) a Licence;
(iv) a Resulting Trust;
(v) a Constructive Trust;
This article focuses on the potential remedies available to co-executors where the basis of occupation is an alleged tenancy agreement or a licence; this is not intended to be a full statement of the applicable law.
a. Occupation of Estate Property as a tenant
If the basis of occupation is an alleged tenancy agreement, the co-executors would want to check for the existence of a tenancy agreement. A written tenancy agreement will confirm the terms between a deceased and the Occupier. However, it does not follow that an absent written agreement means there is no tenancy in place. A tenancy agreement may be verbal, which may often be the case where family members are involved.
A verbal tenancy agreement creates difficulties because the court will be asked to infer terms from the nature of the relationships, conduct and circumstances. These can be objectively inferred from two elements: payment of rent and exclusive possession of all or part of an estate property.
The interplay of rent and exclusive possession is important here. An Occupier may not be considered a tenant if they have exclusive possession, but payment of rent is irregular and/or possession is shared with the deceased. Moreover, an Occupier is not a tenant if they are unable to exclude anyone from an estate property.
If the Occupier pays regular rent and enjoys exclusive possession of all or part of the estate property, then their occupation may be protected by the Housing Act 1988 (HA 1988). Co-executors must therefore serve relevant notices under the HA 1988 to obtain possession.
b. Occupation of Estate Property as a license
If the basis for occupation is not a tenancy, then the co-executors should establish if the Occupier is in occupation under a licence.
Like a tenancy agreement, a licence can be written or oral. Unlike a tenancy, a licence does not grant exclusive possession; it only grants permission to enter and, if applicable, remain upon a property. A licensee does not enjoy the same protection as a tenant.
If the Occupier is living in estate property under a licence, the co-executors could end the licence by serving a Notice to Quit followed by the Occupier’s eviction as a trespasser.
Taking the occupier to court
If serving a notice under the HA 1988, or a Notice to Quit has not had the desired effect of encouraging the Occupier to vacate the estate property, an executor may take the Occupier to court. In this instance, the executor may consider applying for the Occupier’s removal as an executor in addition to obtaining possession of the property.
Co-executors often ask if they can charge the Occupier ‘occupation rent’, especially when the Occupier has been in occupation for a considerable period. (Occupation Rent is an equitable remedy that flows from the discretion of the court and is not to be confused with rent which may arise from a tenancy agreement.) Unfortunately, this remedy is typically unavailable to executors and is usually only available where they act as trustees after completing the estate administration.
This situation can be complex, but co-executors must make prompt decisions.
If you are an individual struggling with a similar situation and looking for advice specific to your circumstances, please do not hesitate to contact us and a member of our team will be happy to go through how we may be able to assist you.