Forgive my elementary question. I've put my first investment property (with tenants in place) under contract. I won't be closing until mid April. Is there any need for me to meet with the tenants before closing, and becoming the new Landlord? It's a duplex, and both tenants have leases in place. I know the leases run with the sale, and I have no desire not to honor them. They both seem like really good tenants. Both units were immaculate when I viewed the property, and the rent is paid on time. I have copies of both leases, which spell out the fact that the owner is responsible for, and therefore owns all of the appliances (range, refrigerator, over the range microwave, and dishwasher). I certainly don't want to get to the end of either tenancy, only to have them claiming they own any of the appliances. Should I have them sign something (before the closing), acknowledging that the appliances are owned by the property owner, or are the leases they signed sufficient? Do you always meet the tenants before the closing, and if so, is it just to introduce yourself, or are there other things I need to do, before the closings, as it relates to the two tenants I'm inheriting? Any and all feedback is most appreciated.
Close to closing you can send out a letter when you are sure the transaction is going to close. Introduce yourself, let them know that you will be the new owner, give your contact information to set up a meeting.
Sometimes people are afraid rents are going to raise; not everyone knows a new owner has to honor the old leases.
Have the tenants sign an estoppel letter. This is so that they can't come back later and say "Yeah, the lease says the owner owns all the appliances, but he told us last week that we could keep them." Same goes for rent, or anything else in the lease.
Once you know that escrow will definitely close, you should introduce yourself to the tenants, so you can get to know each other. You can talk to them about how to pay rent, what to do when maintenance is needed, etc.
Thank you Dawn.
Can you point me in the right direction to find a boiler plate estoppel letter that I could "borrow". I appreciate your feedback. I'm just trying to ensure that I dot the I' and cross the T's.
I did a quick Google search and found this one: http://www.leasingprofessional.com/lease-exhibit-a...
Hope this helps! Michelle
Thank you Michelle.
One other question Michelle...when should I have the tenants sign this? I assume that I want to get it signed before the closing happens, correct?
Yes, I would get it signed before closing. You don't want there to be surprises afterward. You want to know exactly what the terms are, in case the owner promised them all kinds of things you aren't aware of. That usually doesn't happen, but better to be informed.
Perfect. Thank you again for your feedback.
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