I read the other posts about this matter, so I'll ask directly my unanswered question:
How to I assume the lease contract in place? Do I change the name of the landlord and have the tenants initial and me signing at the end, or do I create a new lease? How does it work?
Thank you all in advance!
You must honor the lease in place. I simply let the tenant know about the change of ownership via a letter, telling them what number to call in case of needing maintenance and where to send the rent check. I also tell them their lease will be upheld, and list what the rent is and the security deposit is, along with the end date to make sure we are all in agreement. Some have them sign an "Estoppel letter" but I have yet to do that when purchasing (maybe I should?) that verifies that the tenant agrees with the lease terms and what not.
Once the lease is getting close to renewal time, I let them know what changes, if any, are to be made- namely if the rent will increase. If they are a current tenant, I have them fill out an application and run the background check if they want to renew- I normally have the prospective tenant pay the fee for this but figure in this case the tenant wouldn't be going through the background check if the house hadn't sold.
Hope that helps,
You are obligated to honor the current lease until it expires, then you have the tenant sign a new one. In the mean time, give them a letter with information about the change of ownership (Be sure to tell them that their lease is still valid- they will freak out otherwise) and include info on who to make the rent check out to, where to send it, and who to contact for maintenance issues. It's often good to deliver this in person (if you are self managing) or have your property manager do it in person. Some tenants may be suspicious, if they didn't know the property was up for sale. Tell them they are free to call their old landlord to confirm the change of ownership if they need to.
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