I have an offer in on what will hopefully be my first commercial investment property. I'm wondering how the transfer of ownership is going to work in terms of relations with tenants. When is it ok to start communicating with tenants? Is it the current management company that informs them of a change of ownership? and therefore management? Or is that responsibility with me, the new owner? Any other information relating to this would be helpful!
@Rachel Payton - As far as timing is concerned, you should wait until after closing before contacting tenants. If you are self-managing the property, then you should reach out to the old management company and let them know their services will no longer be needed and to direct any tenants to you. If you're hiring a new management company then you should let them do the same on your behalf. You don't want to rely on the old management company for anything, once you close on the property you should post a notice for all tenants that provides them with new contact info and rent payment info. If you happen to get email addresses and/or phone numbers from the seller then it may be worthwhile to contact tenants directly as well.
Hi @Rachel Payton . Michael gave you some good advice, and I'm just going to add to it.
Once your offer is accepted, request that all contact information for all current tenants be conveyed at or just before closing. You will also want the current owner to provide copies of all leases, and tenant estoppel statements - basically the tenant signs a paper that tells you how much they are paying in rent each month to prevent them from giving you a different amount after closing. The Estoppel should also have a place for them to tell you how much security deposit they gave, so you get the same amount from the current owner.
You're in Oregon, I'm not sure if that state requires interest to be paid on any security deposits - some states do so right now start reading your landlord tenant laws.
When you say commercial, do you mean office space type commercial or large multi family residences?
@Mindy Jensen Anything over a 4-plex is considered commercial. It's only a 5-plex.
Thanks, @Rachel Payton . I missed the 5-plex part.
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