I've recently purchased a home (that I intend to live in), and it includes a one-bedroom apartment above the detached garage. The apartment currently has a tenant. This tenant is a co-worker of the current seller, they do not have a contract, and the tenant has not paid a security deposit. It's simply a verbal agreement between both parties. The seller communicates that the tenant is very dependable and has never missed a rent payment. The tenant would like to continue renting the apartment.
This is the first time my husband and I will be landlords. My husband and I are in the process of writing up a rental agreement. We will definitely be asking for a security deposit. We have met the tenant and confirmed employment.
Any words of wisdom out there? Anything to watch out for?
Have you already bought the house?
If not - you'll want a lease before closing. Without a written lease (can be month to month), a tenant can claim anything and you're opening yourself up to dispute. The lease should outline the lack of deposit as well.
If you already closed and they're now your tenants - then get them to sign a lease immediately - and be very, very nice until all the paperwork is in.
We close mid-month. We intend on having the tenant sign a lease with us as soon as we officially have the house. We also thought about asking for a deposit. Any thoughts?
IMO waiting to get a lease signed until after close is a mistake. The lease transfers with the property, so it provides you protection.
If you wait, you can ask for a deposit but who knows if you'll get one.
I would never accept a property with a tenant without any written proof of the terms to their tenancy. It's a potential disaster.
If you're determined to wait, and just looking for advice on writing up the lease or how much to ask for a deposit, my only advice is to talk to a real estate lawyer.
Don't wait until after closing to resolve this. You should require an estoppel certificate from the tenant BEFORE closing so that you know exactly what the terms/conditions are of their agreement with the current landlord, especially since it's not a written agreement. If you don't get this document now, the tenant can later claim the agreement is whatever they want and you have no real way to disprove it.
Jennifer filter some of this noise in the thread. Transactions like this, inheriting tenants, happen every single day. Build a relationship with the tenant and have them sign a new lease. It doesn't need to be any more complicated than that. If you get a vibe that the tenant is good and property is being cared for... then I wouldn't shake the tree wanting a deposit. If you think and plan for good things then mostly likely gratitude will be returned. I would give the tenant a welcome gift, just because you will be living next to them. They will feed off you positive vibration.
Get the Ultimate Beginner's Guide
Sign up today to receive the popular eBook for free!