The Complications of Inheriting Tenants(Advice?)

Multi-Family and Apartment Investing
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The Complications of Inheriting Tenants(Advice?)

Tim Richter
Rental Property Investor · Peabody, MA · Member since 2019 · 55 posts · 19 votes

Hello Bigger Pockets!

I'm happy to say that at the end of April I closed on my very first property. Yay! I purchased a two family in Haverhill, MA and I'm eager to get in there and start improving. Here's the catch, the property came with tenants. This could be seen as a huge problem, but in my case it was seen as an advantage. Both tenants are on section 8 and during these trying times (Covid-19) a guaranteed rent check is pretty attractive.

So here's my issue. Our P&S agreement stated that the property needed to be delivered with the upstairs unit vacant within 60 days of closing. I've contacted the housing authorities and it's beginning to sound like the upstairs tenant won't be out of there by the anticipated date June 1st. Considering there is no way to evict currently I decided no big deal, I'm just going to collect rent until they leave or I can evict(whichever comes first).

I'm not really worried about having to evict yet. My bigger concern is what I need to do (i.e. forms/contact/notices/other) so that I can have these tenants pay me their portion of rent. The vouchers I'll receive, but how would you guys and gals go about letting the current tenants know how they need to pay rent? 

To clarify, I'm keeping the current downstairs tenants for now, eventually need the upstairs tenants to leave, but need to make sure I get paid for the time they both are occupants. Both are section 8 TAWs.


Any advice is appreciated and if you have any questions I'm happy to answer. Just wanted to keep it as short as I could. 

Thanks

Tim

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  • Jonathan BombaciBusiness Member
    Real Estate Agent · Lowell, MA · Member since 2019 · 1k+ posts · 1k+ votes
    6y

    Normally at closing we just have the new owner give the tenants a letter explaining they are the new owner, tell them how to pay rent, and who to contact if they need repairs. I may be able to dig out an example to send you. Private message me your email address and I’ll get a copy over to you. 

    Now with section 8 you should contact the tenants case manager to tell them of the transfer of ownership. They’ll have some forms for you to fill out including a W9 and direct deposit approval. However given it’s the end of month they probably won’t have this completed by the 1st so the old owner will get the $ for June and they should send it to you. Contact your closing attorney or real estate agent after confirming this with the case manager. 

    Congrats on closing on your first property and yeah Inheriting 2 section 8 tenants is definitely an advantage in a time like this. Before talking to the case manager google what the voucher limits are in Salem do you can tell them you’re planning to increase the rent to $x,xxx upon lease renewal and lay the groundwork for that. 

    Best of luck,

    Jon

    [email protected]978-710-8611
    Candor Realty4.760 Reviews
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  • Tim Richter
    OP
    Rental Property Investor · Peabody, MA · Member since 2019 · 55 posts · 19 votes
    6y

    Thank you for your advice Jonathan!

    I have already contacted case managers and filled out the required direct debit forms. I didn't talk about increasing the rent yet, is it too late for that at this time?

    The seller is sending the check over for this months rent and also the security deposit I believe. Still trying to confirm this. 

    If you could send me a sample of that letter it would be a huge help.

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