Death Clause in Lease for Rental Property

Inquiry: My mother recently passed away unexpectedly at age 86. She was a 28 year renter of an apartment. After she died, I was notified by her landlord that he had gotten her to sign a lease addendum (when she was in her early 80’s) that was specifically a “death clause.” The clause states that, upon her death, her estate is forced to pay an early lease termination fee of 3 months rent. This is in addition to maintaining the rent monthly up until the time the apartment is vacated of all her belongings. I have scoured the internet and have found nothing like this anywhere in any lease. To me this is excessive and, indeed, unconscionable. Is this legal?

Response:  The fact pattern raises several issues.  According to MCL 554.633, certain provisions cannot be included in rental agreements.  Provisions that exclude or discriminate against a person in violation of the Elliott-Larsen Civil Rights Act, MCL 37.2101 to 37.2804 are prohibited.  According to the Elliott-Larsen Civil Rights Act, MCL 37.2502, a person engaging in a real estate transaction, or a real estate broker or salesman, shall not on the basis of age of a person, discriminate against a person in the terms, conditions, or privileges of a real estate transaction or in the furnishing of facilities or services in connection with a real estate transaction.

In the fact pattern, when the tenant was in her 80’s, after the lease had been signed years before, the landlord “got” her to sign an addendum to the lease that included a death clause. A death clause would be a legal provision in a lease if it were applied to all tenants, that is. if it were included in the form lease used for all tenants. In this case, that did not happen. It was only after the tenant reached an upward age, that the landlord approached the tenant to execute the addendum. This tactic is arguably discriminatory because it is not applied to all tenants, but only to the aged tenant.

Another issue is whether the agreement to execute such an addendum was the product of undue influence. The facts of the actual negotiations should be investigated and assessed.  Were there any witnesses? A tenant of such an advanced age would likely feel that they had no opportunity to bargain.  To present an addendum to a tenant of advanced age after they have been a resident for such a long term could be considered by a fact finder to be such morally offensive pressure that the elderly person’s consent to the bargain is ineffective. Therefore, the elderly person would be allowed to void the contract or rescind the obligation.

In addition to discrimination and undue influence is the question of whether the 80-year-old had the legal capacity to contract. Persons with a mental capacity so deficient that they are incapable of understanding the nature and significance of the contract may disaffirm the contract.

Finally, there is the issue of whether the addendum was offered with adequate notice. In order to change the terms of a contract, the landlord must provide notice equivalent to the term of the period as for example, 30 days if the tenancy is month-to-month; 6 months in Michigan if the tenancy is from year to year.

The personal representative of the mother should consider disputing the provision as being illegally obtained.  Discussion could be put into writing that if the alleged debt is pursued, the response will be a request for attorney fees and expenses in defending the suit as well as a counterclaim for discrimination and undue influence.  Keep an eye on the security deposit timelines as well as the fair debt collection practices acts discussed within this website under the appropriate categories (landlord tenant and consumer law respectively).

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