Quick question for you all.. I am in the process of purchasing my first duplex. The property is 100% Occupied and I was wondering if the lease agreements just transferred over or I have the right to re-write the lease at the time of the purchase. I have not read the lease agreement so I don’t know if I will want to change it but was just exploring my options. Any help would be appreciated. Thanks!
You must honor the existing leases until they expire. You can put a new lease in place at the end of the existing lease term.
Thank you! Thanks what i figured
Make sure you get a copy of the leases ahead of time (and any other info such as applications for each tenant), and that the security deposits are transferred to you at closing.
On closing day, I leave each new tenant a letter explaining who we are, that we have purchased the building and will honor the existing lease. I let them know who to contact for repairs, where to send rent, and that the security deposit (state the amount here) will be transferred over to us. In Michigan, we have to tell them where the money is held as well. I also include the monthly rental amount and lease expiration date in the letter so we are all on the same page. The current owner should give you contact info for the tenants, but if not you can request it from them at this time too. I gave my newest tenants a quick form to fill out- names, numbers, e mail addresses and SSNs and an envelope with a stamp on it to make it really easy.
When rent is due, expect confusion even if you have told them how and where to send payment. I had one tenant tell me that the previous landlord used to come by and pick up cash from him!
The existing lease for the 3-unit I just bought had a termination clause that said if the premises sold the landlord could choose to terminate the lease with 45 day's notice. Weird, but I suppose it happens :)
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