How to kick a tenant out of a multifamily?

Question

Hi BP,

I believe I have found a good deal doing my analysis on a multifamily. I plan on living in one side and renting out the other, or as we call it "house hacking."

The only issue is that both units are currently being rented. So my question is, how do I go about getting a tenant out of one side? Would this even be legal and right to do? If so, what would be the "right" thing to do?

Bjorn Ahlblad · Answer

That can be an expensive and problematic process depending on local laws and the lease. Make this a condition of sale make your offer to have one side empty on closing and make sure that is the case. All the best!

Account Closed · Answer

What @Jim Cummings said.  You'll need to honor the leases in place when you take possession of the property.  You nor the current owner can terminate the lease without cause. Couple different options on how to handle.

Jim Cummings · Answer

@Christian Laines. Your in Tennessee. I would guess the Landlord Tenant laws are Landlord friendly - but it's your responsibility to know what Law says. As a RE Agent - ignorance of the Law will be no excuse. You will be held to a Higher Standard as a RE "Expert".

1. When you close on the property - you will inherit the tenants if there are existing leases.

2. You will need to comply with the existing leases. Meaning, if the unit you would like to occupy has 6 months remaining on the lease, you can not arbitrarily terminate the lease (without cause) so you can move in.

3. Be sure to get copies of the Leases (ideally as part of due diligence) , and Tenant Deposits at closing.

4. Know what the leases (and State laws) say about time parameters to notify Tenant of Non-Renewal of the existing lease.  If it's 60 days notice, is it 60 days notice and leases terminates on last day of month, or just 60 days notice? If you screw up the notification date - the judge might make you start all over again on notification.

5. If your lease has several months remaining, let the tenant know ASAP after Closing, you will not be renewing the lease, so you can move in.

6. Follow up by sending the Tenant a written statement you will honor the existing lease, but you will not be renewing the lease.  Also, notify tenant if they want to find a new place prior to the end of lease, you would be happy to terminate the lease without penalty.

Bjorn Ahlblad · Answer

It does not matter about the disclosure that you want to live in one side. What matters that the tenant is really OUT! ;<)

Jill F. · Answer

It varies by state. In Ohio, it is legal to demand your property back for any reason at all with the proper non-renewal notice at the end of the lease term ( or 30 days notice for month to month lease or oral lease). It is important that the notice be written and delivered before the start of the last month-- if you want a month to month tenant out at the end of August, you must deliver notice BEFORE August 1.  I don't think there is anything unethical about wanting your place back for your own use.

Charlie MacPherson · Answer

@Christian Laines  This is something that your broker should be able to help with.

If the tenants have a lease, you are most likely required to honor it.  Consider cash for keys if that's the case.

Be sure you understand the process and costs for eviction in your state, in case it goes in that direction.  Here in MA, a "professional tenant" can tie a landlord up for almost a year without paying rent.

As far as "make sure this is the case", do a final walk through on the day of closing to ensure that one side is vacant and that there was no move-out damage.  If either is a problem, you either don't close or do a hold-back of funds at closing sufficient to remedy the situation.

Christen G. · Answer

Your agent should get the leases as part of their due diligence. Hopefully they're on a month to month lease (this is common when folks are selling MFH) and you can just issue whatever your state's law is (30 or 60 day) for non-renewal of said lease and move-in once they're out. Be sure you follow the state's law on move-out procedures, returning what's left of their deposit, etc...

Christian Laines · Answer

@Christen G. Account Closed Great information guys, thanks for the info!

Christian Laines · Answer

Hi Jill, does the 30 day notice have to be a legal document written by an attorney?

How to kick a tenant out of a multifamily?

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