Can an owner renew a Tenant Lease just before Title Transfer?

Question

I am about to close on a triplex. We are inheriting two tenants (one unit is vacant). During the due diligence we were given the information that the respective leases ended 7/1/22 and 8/1/22. Now, one day prior to close, we have been forwarded the actual lease agreements and it appears that the current owners have created a new lease for one of the Tenants for a period beginning 7/1/22 and ending 7/1/23. Are they allowed to do this? Do I have any recourse here?

Kim Meredith Hampton · Answer

@Cassie Mcconville, did you put in your contract or an addendum that both parties signed to not renew or lease any of the units?

Conn G. · Answer

Ouch, did you tell the owner not to renew their leases or anything of that matter? I would talk with owner about canceling these contracts because as a new owner, you want to enforce your own contract with tenants

Nathan Gesner · Answer

Technically, they can't make any changes to the property while under contract without your permission. You are buying the property in it's current condition at the time of going under contract. They can't swap appliances, paint the walls, change out flooring . . . or create new contracts that affect you.

The contract doesn't start until 7/1/2022 so I recommend you contact them immediately and let them know those contracts need to be canceled.

Theresa Harris · Answer

How different were the terms of the new lease compared to the old one? Did the rent increase a bit or did they lower the rent?

Michael K Gallagher · Answer

@Cassie Mcconville I'd say if they are allowed to do that or not has a lot to do with what your contract language was and what your estoppel certificate said as well. But In theory while its annoying there really aren't any standing laws that I know of preventing the seller from renewing a lease prior to sale (but I am not a lawyer so what do I know?), unless there are other speculations in the deal.

Michael Paling · Answer

I'm buying a duplex right now and the owner didn't want to vacate any tenants before closing. One of the tenants is already moving out anyways, so we submitted an addendum saying they can't renew or find new tenants before the 45 days for closing are up, and then after that it must only be month-to-month.

I'm still a rookie, so I don't know what you can do, but if something doesn't work out, maybe you can offer the tenants cash for keys?

Can an owner renew a Tenant Lease just before Title Transfer?

Can an owner renew a Tenant Lease just before Title Transfer?

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