What steps to take while purchasing a property with tenants

[Tom Server]

Hello, I'm about a month out from closing on a triplex with tenants. 2 of the tenants leases are expiring end of February and the third is on a sec 8 til Sept.  The owner has a personal property manager taking care of the property 

Should I do anything with the tenants or property manager prior to closing? 

Am I allowed to reach out to the tenants?

Am i allowed to reach out to the property manager ?

thanks in advance

[Nathan Gesner]

Quote from @Tom Server:

1. I recommend using an estoppel. I'll give you the details below.

2. You can't legally do anything until the sale closes, but you may get permission from the Seller to introduce yourself to the property manager and tenants. You should definitely review their payment history, maintenance, lease violations, etc.

3. As soon as you close, deliver an introduction letter. Let them know you are the new owner, how they can pay rent, and how to report maintenance or otherwise communicate with you. I also recommend setting an appointment for a detailed inspection within your first week of ownership. Ask questions, get to know the renters, and document the condition of each rental so you have a record from that point forward and can hold tenants responsible for damages.

Your offer to purchase should include a requirement that the Seller provide all documentation and agree to sign an estoppel certificate (also called an estoppel form or agreement). The estoppel is a form filled out by the tenant, then confirmed by the Landlord, and then accepted by the Buyer. It's supposed to ensure there are no surprises after closing. For example, I often see Buyers purchase property thinking there is a $1,000 deposit but then the tenant claims it was $2,000 because they paid the last month's rent. How will you know? An estoppel certificate fixes this problem.

Some things it may include:
1. Tenant name, contact information, and address
2. Occupancy date
3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate
4. Are there any modifications to the written lease?
5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?
6. Current lease term (expiration date, month-to-month)
7. Current rent rate
8. Rent due date
9. Security deposit amount
You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchanging "doc" with "pdf" for more options.

Here is an example and explanation: Sample Estoppel

Some have a lot of legal jargon but this document does not need to be so detailed. This is an essential tool for anyone buying a tenant-occupied property.