Real Estate Investor · Lincoln, NE · Member since 2013 · 584 posts · 353 votes
We just bought a 14 plex with 1 vacant unit. We made all the tenants sign a new lease with us, but one tenant is pushing back. Apparently he's a lawyer and wants to make a bunch of markup's to the lease, which I'm not crazy about.
Question is, do you really need to put new leases in place? This guy has a lease with the previous owner (no markups and strikingly similar to mine) and that lease was legally assigned to me at the closing by the seller. I'd like to know what everyone else does when they buy a property with tenants in it that they want to keep.
I agree with @Marc Ramsay - you cannot actually make the tenants sign a new lease. The fact that you got 12 of the 13 tenants to do so is awesome...but if the guy doesn't want a new lease he absolutely doesn't have to sign one and you have to honor the terms of the existing one.
That being said, if the leases are a weird format I will ask the tenants to sign a new lease with me that have the same terms as their existing lease and also sign a release from the existing lease. I prefer this because I know my lease inside and out...I don't want to have to read 5 pages of somebody elses lease to figure out what it does and doesn't cover.
@Wade Sikkink I always leave the existing leases in place until they expire as long as the terms of the lease are acceptable to me. I haven't hit one yet that I had any real issues with. Tell the lawyer that he can keep his existing lease until it expires, but he'll be expected to sign your new lease at that time and you won't be modifying it for him, unless there's an actual legal issue with it.
I agree with @Marc Ramsay - you cannot actually make the tenants sign a new lease. The fact that you got 12 of the 13 tenants to do so is awesome...but if the guy doesn't want a new lease he absolutely doesn't have to sign one and you have to honor the terms of the existing one.
That being said, if the leases are a weird format I will ask the tenants to sign a new lease with me that have the same terms as their existing lease and also sign a release from the existing lease. I prefer this because I know my lease inside and out...I don't want to have to read 5 pages of somebody elses lease to figure out what it does and doesn't cover.
I agree, you can't force an existing tenant to break a lease without their agreement. But sometimes you can talk them into signing a new lease, especially if you can give them a perceived advantage such as being able to lock in the present rent level for another 12 months instead of a possible increase once their present lease expires.
His existing lease is month to month (been in the property 3 years) but I know he's going to be moving in 6 months or so because he's building a house. I'll just wait him out. However, because he's month to month could I give him an ultimatum like sign the new lease or be evicted?
@Wade Sikkink I didn't realize he was month to month. In that case you are free to impose a new lease or he's free to leave, however, if you know he's leaving in 6 months, why run the risk of an empty unit this time of the year, and as long as he's paying the rent and the current lease is somewhat acceptable, then I say run with it.
I looked up where you live as I've never heard of Firth, NE before. Wow! that is one small town! What's the population there? About 500 people? :)
Yeah, Firth is about 500 people, but the property is in a neighboring town with a few thousand that is in turn a bedroom community for a city of over 250k, so rental demand is very high where this property is located. (translation: rents will be going up :-))
His existing lease is month to month (been in the property 3 years) but I know he's going to be moving in 6 months or so because he's building a house. I'll just wait him out. However, because he's month to month could I give him an ultimatum like sign the new lease or be evicted?
For six months, and since the existing lease is similar to yours, I would let it slide until he leaves. Sometimes you have to pick your battles and this doesn't sound like a worthwhile battle to fight -- you can spend your time in more productive ways.