Inheriting MTM Resident

4 Replies

Hi Everyone!

I'm in the process of purchasing my 2nd multifamily (woooo!!) and had a quick question. One of the individuals is on a MTM lease? Am I able to immediately request that they sign a renewal? The lease specifies a 30 day notice from either party is required for the lease hold over.. If they opted to not sign a renewal, I would be able to just 30 day notice them, correct? Thanks in advance for all of your help - I love the hindsight and these forums are so great!


Alex 

Hi Alex. I believe this is more of a state specific question, but over here next door in Colorado, you would have to give them a 30-day notice to change the terms of their lease, once you purchased the property. Some states require a 60-day notice, so make sure you are following your state's law.

How long have they been a MTM tenant? Do you want them to sign a 1-year lease, or would you really rather they leave? Do you know how the current landlord qualified them for their lease? You don't want to have them sign a 1-year lease, only to discover they don't pay the rent on time and you then have to start the eviction process.

If the current owner didn't use the same qualifications that you would use, I would run a background check on them at your own expense - they are already there and if it comes back fine it is a small price to pay for the peace of mind. If they don't make the cut, serve them with the notice to vacate that complies with your state laws.

Congratulations on your purchase and good luck!

Medium fbprofileMindy Jensen, BiggerPockets | [email protected] | https://www.biggerpockets.com | CO Agent # FA100049656 | Podcast Guest on Show #129

I only used MTM contracts.  They're great.  Easy to get rid of a tenant if they're a problem, easy to change any terms, rules, if needed.

If I was you, I'd leave them on a MTM agreement, but if you want to use your own agreement, give them the new terms in writing saying the terms are in effect in 30 days.  It doesn't matter if they sign it.  You can just say in 30 days, here are the new terms.  And if you do it that way, rather than get them to sign a new agreement, then I'd send it by priority mail with delivery confirmation.  If they have email, send it by email, too.  That way, you have proof of it being delivered, and they can't avoid signing for it.

But, if you are going to meet with them anyway, you could sit down with them and say here's the new MTM contract. If they don't want to sign it, then you hand them a 30 day notice to vacate plus a 30 day notice of change in terms of tenancy (in case they're a holdover).

As @Mindy Jensen mentioned, you might have to give more notice. In CA, if they've been in a unit for over 12 months, you have to give them 60 days notice.  So check on that.

But, I'd recommend leaving them on a MTM for now. See if you like them before signing them up for a one year.  Honestly, MTM contracts are just so much better in my opinion.  Yes, tenants can leave, but tenants leave when they want to anyway.  If a tenant wants to leave who is in a lease, they often start creating problems so you'll let them out of the lease.  All of a sudden they say there's mold or any number of problems, all in an attempt to be able to get out of the lease.  If a tenant wants to leave, it's usually better to just let them.

@Alex N. you should be sure to give them some time to consider your change of terms (whatever they are). For example, you are closing on June 2nd, hand deliver the new terms on the 3rd and give them 5 days to consider them. Tell them if you don't receive the new signed agreement back by June 8th 5 pm then you will be delivering the end of tenancy notice. Keep in mind under this scenario they would have until the end of JULY to vacate the property. If you closed and were able to set the time line for their return of the new agreement before June 1 then June 30 would be the last day of tenancy should they not sign. 

Medium rre 1to1 small sizeBill S., Reliant Real Estate, Inc. | 720 207‑8190

@Mindy Jensen , @Sue K. -- thank you all so much for your responses. It's greatly appreciated. I really pulled a bit from each of you and came up with a good plan I think. I'm definitely going to screen them for my own peace of mind. If they look good and would prefer to stay on a MTM, it makes sense for the time being. I do want to be sure to give them time to review new terms if that's the route we're going. Thanks again, all!