Can the Bank Tell You Which Unit you Must Occupy

[Michael King]

Good evening everyone. I am in the process of purchasing a multi-family property. I plan to move into the property with my wife. The bank that is financing us wants us to provide proof of residence after we close. This is not a problem as we will be living on the premises. But here’s where it gets complicated... The property is a fully occupied 4-family. Three of the units have 1-year leases (one ends next month, one ends two months from now, and one ends in almost a year from now), the 4th unit has a tenant at will agreement. We want to move into the unit with a lease that expires a year from now for a couple of legitimate reasons. Reason #1: the tenants need to go. When we had performed a walk-through of the property, the tenants had covered all the smoke detectors to smoke pot in the house. #2: we like that unit the best and plan to live there for a long time. #3: we like the other tenants and want to keep them. Next, we cannot end their lease for no reason (at least not in MA) just because the building sold. That means that our options are either to let the lease expire naturally, or to evict the tenant for violating the lease for smoking pot inside / covering smoke detectors and risk having them become a tenant at sufferance or destroying the property. What I’d ideally like to do (because it makes the most sense) is: close on the property. Wait until the tenant’s lease expires naturally (in about a year) and don’t renew it. In the meantime build up a bit of an account balance for that property from the four rented apartments, and then move into the desired apartment with a little cushion in the bank. This means that we wouldn’t actually be occupying the property until the lease (which we can’t legally end) is up. But this makes the most sense because we don’t want to lose the tenants in the other apartments either, and don’t want to live in the other apartments. The big question is: can the bank tell us which unit we have to occupy? For example, can the bank tell us, “you need to occupy whichever apartment you can make available first.” That would require us to empty out a unit with a perfectly good tenant, move into an apartment that we don’t want to live in long term, wait until our desired unit is available, kick the undesired tenants out after a year, and move for a second time... Anyone have any insight on this? Can I just tell the bank, “we’re going to move into this apartment as soon as the lease expires and then we will give you proof of address.”? Thanks! Mike