Tenant Transfer Process
I was wondering if you inherit tenants during a purchase of property, in a duplex. I am inheriting a tenant but wanted to make sure that the next months rent is transfered to me. Also I want to make sure the deposit of escrow account is transferred to me. Also I would like to keep the same terms until end of their lease where it would transition to a Property Manager's lease.
What is the process. I am closing in about a month but I want to make sure I do my due diligence. Also the landlord had a yearlong lease with them and not month to month and can't have the tenant transition out in time, but I don't want to lose out on the deal because of the tenant issue. I will be running my credit checks/screening and all that prior to new lease at the end of their term to qualify. But for now I just would like info on what I need during closing for the right paperwork indicating I'm the new landlord and have the deposit under my name, etc.
@Shivam Patel I have had the closing company handle transfer of prorated rent and security deposit. I have also just had it handled with a check from the seller at closing. Either way, clarify ahead of time how much money you are getting and how they are giving it to you. Do not sign closing paperwork without receiving the prorated rent and deposit transfer.
In most states, the lease transfers with the property. You are generally stuck with the lease until the end of term. Most tenants will agree to sign a new lease provided term and dollar amounts are the same. This can be for any term. For example, if the tenants have 7 months remaining on a 12 month lease, you just write the lease for 7 months with the same termination date at the same monthly rate.
You also mention running credit checks and screening at the end of their lease term. It is very irregular to require screening on an existing tenant. If they are taking care of the property and paying rent, there is no reason to do this. If you have reason not to trust the tenant, just ask them to leave.
Okay. I'll be sure to do that. Hmm I'll take that under account. Thanks man, I really appreciate your input.
#3 Managing Your Property Contributor
This should be in the contract. Your lawyer can handle it. I'd also make sure the tenant knows who to pay and how to pay you.
Yeah. I just don't want it to be a situation where the tenant is still legally bound to pay the old owner until the end of lease. But yes I will get a lawyer to look over things.