Rent From Inherited Property Before the Estate Is Divided: Who Collects It, How to Keep the Books and What Heirs Must Be Told

A father's house is let to a tenant who pays monthly. The father dies, but the siblings have not yet divided the estate. Who is entitled to the rent in the months that follow, who collects it, who pays for the leaking roof, and how much must the others be told? This guide deals only with the period before partition. For the general rules on heirs and administrators, see the main estate guide, and for transferring the title deed see inherited land transfer at the Land Office.

The core answer

The law (Civil and Commercial Code). Rent is a fruit of estate property. Where there are several heirs, Section 1745 gives them rights and duties over the estate jointly until partition is finished, and applies the co-ownership rules in Sections 1356 to 1366 so far as they do not conflict with the Book on succession. Under Section 1360, each co-owner may use the property without infringing the rights of the others, and is presumed entitled to fruits in proportion to his or her share. Section 1362 makes every co-owner share the cost of management, taxes and upkeep in proportion. If there is an administrator, Section 1719 gives the administrator the right and duty to do what is necessary to manage and distribute the estate, and Section 1720 makes the administrator answerable to the heirs under Sections 809 to 812, which cover diligence, accounting and handing over money.

Our practical view. Most disputes do not come from unclear law. They come from money going into one person's pocket with nobody seeing the figures. The step that prevents the most disputes is a separate bank account for the rent, a receipt for every item and a regular summary sent to every heir, as shown in the table below.

Hypothetical: Somchai, from Khon Kaen, dies leaving two let shophouse units. His wife and three children, Mali, Ton and Fah, are the heirs. Mali lives nearby and has been receiving the rent into her personal account for six months without telling anyone. Ton becomes suspicious when the roof leaks and nobody repairs it. We use this family as the running example.

1. Who Owns the Rent Received Before Partition?

Rent from estate property remains part of the estate. It is not the personal money of whoever happens to collect it. Section 1360 presumes that co-owners are entitled to fruits in proportion to their shares. Each heir's share comes from the law or from the will (see the main guide). Section 1357 presumes equal shares among co-owners where nothing else is shown, but in an estate the shares often differ by class of heir and by will, so check the real shares first.

• Rent that fell due before the death but was not yet paid is also an asset of the estate.
• A security deposit paid by the tenant is not income. Keep it separate and return it as the lease provides.
• An heir who lives in the property may use it under Section 1360, but must not infringe the others' rights. If one heir occupies the whole house and the others object, agree compensation in writing.

2. Who May Collect the Rent and Decide?

With an administrator. The administrator has the duty to manage under Section 1719, including collecting rent and looking after the leases, within the powers given by the will or the court order. Other heirs should not collect the rent or sign in the administrator's place.

Without an administrator. The heirs are co-owners. Section 1358 presumes that ordinary management is decided by a majority of the co-owners. Any one co-owner may always act to preserve the property, for example an urgent repair to stop damage. Major changes need a majority that holds at least half of the value of the property, and some matters need every co-owner to agree.

Who signs a new lease? A short monthly or annual lease that counts as ordinary management can be decided by majority, with one heir authorised in writing to sign. A long lease or heavy terms, such as a multi-year extension, a fixed low rent or letting the tenant alter the structure, should be signed off by every heir, because Section 1361 allows the whole co-owned property to be disposed of or encumbered when all co-owners agree.

3. Existing Leases and New Leases

The old lease continues. Section 569 states that a lease of immovable property does not end because ownership is transferred, and the transferee takes over the transferor's rights and duties towards the tenant. The tenant may stay until the term ends. Heirs and administrators cannot remove a tenant at once simply because the owner has died.

Leases over three years must be registered. Section 538 requires written evidence signed by the party to be bound, and if the term exceeds three years (or is for the life of the lessee or lessor) the lease must be in writing and registered with the competent official. Otherwise it can be enforced only for three years. This applies to the deceased's old leases and to any new lease the heirs make.

What to do once you know there is a tenant:

1. Obtain a copy of the lease, receipts and proof of any deposit.
2. Tell the tenant in writing that the owner has died and which account to pay into (see the sample notice below).
3. Check the end date and renewal terms.
4. No single heir should take years of rent in advance or agree to a rent cut without approval.

To: Tenant (name / unit no.)
The owner of the property under the lease dated ........ died on ........
The lease continues unchanged. From the month of ........ please pay the rent into
Bank ........ account name "Estate of (name of deceased)" number ........
and keep the transfer slip as proof. For repairs, please contact (name / phone).
Signed ........ (heir / estate administrator) Date ........

4. How Should the Books Be Kept?

Where there is an administrator, Section 1732 requires the administrator to manage, report with an account of the management, and divide the estate within one year from the date in Section 1728, unless the testator, a majority of the heirs or the court sets another period. Section 1720 makes the administrator answerable to the heirs under Sections 809 to 812, which include accounting and handing over money received. Where no administrator has been appointed, no single form of account is imposed by law, but an heir who collects money for others should keep records that can be checked, because Section 1362 makes everyone share the outgoings in proportion, so the outgoings must be shown to be real.

Practical rules for the books:

• Open a separate bank account in the estate's name, never mixed with personal money.
• Record every item when it happens, with the receipt number or transfer proof.
• Use separate categories: rent, deposits (not income), repairs, taxes, insurance, common charges.
• Close the books monthly and send the summary to every heir as in the table in section 6.
• Keep the papers until partition is finished and every heir has acknowledged the accounts in writing.

Sample income and expense ledger (adapt the columns):

Estate of: Somchai (hypothetical)   Property: 2 shophouse units   Month: ........
Date   | Item                            | In       | Out     | Balance  | Proof
1 Oct  | Brought forward                 |          |         | 12,000   | Passbook
5 Oct  | Rent unit A (tenant 1)          | 6,000    |         | 18,000   | Transfer slip
5 Oct  | Rent unit B (tenant 2)          | 5,500    |         | 23,500   | Transfer slip
12 Oct | Fix leaking roof, unit A        |          | 3,800   | 19,700   | Contractor receipt
20 Oct | Fire insurance premium          |          | 2,400   | 17,300   | Receipt
       | Tenant deposits (separate acct) | Not income: unit A 12,000 / unit B 11,000
Month total: in 11,500  out 6,200  difference 5,300   Prepared by: ........ Sent to heirs on ........

Large or non-urgent spending, such as extensions or structural changes, should be approved first. Urgent repairs to protect the property can be done at once, but report them afterwards with receipts.

5. Tax in Outline

Rent is assessable income under the Revenue Code, and an undivided estate is treated as a separate income taxpayer (Section 57 bis, second paragraph, which sits alongside Section 56 on who must pay income tax). Two practical consequences follow. Income earned after the death should not simply be reported under the deceased's name or under one heir's name without thought, and the estate may need its own taxpayer number. The person who files for the estate is generally the administrator, an heir or whoever holds the property. Figures such as deductible expenses and rates change by year and by facts, so check with the Revenue Department or a tax professional each year.

Land and building tax is an annual tax on the property. Who must pay depends on who owns and who uses it, and property let out for income is generally classed by its use. Keep the local authority's tax notice and pay from the estate account. This guide does not compute figures. For fuller tax planning see our tax practice.

6. What Must Be Disclosed to Heirs?

Disclosure is between heirs only. Do not forward it to outsiders or post it in a chat group that includes outsiders. If some heirs live abroad, use email or a closed group that keeps a record. In our example, Ton should have received a monthly summary from the first month Mali took the rent, which helps the siblings talk before distrust grows.

7. When Heirs Disagree

The order we usually suggest, from lightest to heaviest:

1. Ask for the information in writing, listing the items, the period and a deadline such as 15 days.
2. Agree interim rules: a central account, one contact person, and majority decisions on ordinary matters under Section 1358.
3. Mediation through an elder relative, a lawyer or the court's mediation centre.
4. Appoint or replace the administrator. If there is none, see filing the court petition for an administrator and choosing an executor in a will. If there is one who is not acting, see an administrator who is not distributing or answering heirs.
5. Sue for partition. Section 1363 lets a co-owner demand partition unless a juristic act prevents it or the property is permanently co-owned by its nature, and not at an inopportune time. A juristic act may exclude partition for no more than ten years at a time.
6. Claim back or demand an account of money taken. If estate money was used without right, liability and recovery depend on the evidence, and results are not guaranteed.

Do not access another heir's bank account, phone or email without authority. That may breach the Computer Crime Act and the Personal Data Protection Act. Use document requests and the courts instead. Where a minor is an heir, see a minor heir and a parent managing the inheritance, and if more property turns up after partition, see additional estate assets found after distribution.

8. Checklist

Before the first month's rent

• Identify the heirs and each heir's share
• Check whether there is an administrator and the scope of the powers
• Get copies of the leases, receipts and proof of deposits
• Open a separate estate bank account
• Send the notice to tenants

While undivided

• Keep monthly books with proof for every item
• Send the summary to every heir as in the table
• Seek approval before large spending or a new lease
• Check whether any lease over 3 years is registered
• Keep tenant deposits apart from income

Tax and closing

• Check the estate's income tax filing duty with the Revenue Department
• Pay land and building tax on the notice
• Before partition, close the accounts and have every heir acknowledge them in writing

Further reading

• Parents have died: how is the estate divided — the general rules on who the heirs are and when an administrator is needed
• Inherited land transfer at the Land Office — transferring the title deed once you are ready to divide
• Filing the court petition for an estate administrator — if someone needs authority to collect rent and sign leases
• Choosing an executor in a will — choosing a person who can keep books and care for property
• An administrator who is not distributing or answering heirs — when the administrator will not produce accounts
• A minor heir and a parent managing the inheritance — when an heir is under age

Estate rent is easy to manage when there is a separate account, complete records and every heir sees the same figures.

We help heirs and administrators set up rent accounts, review leases and resolve disputes between heirs. For an initial consultation, call +66 92 254 2045 or send us the details. See also our estate practice and tax practice.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.