I'm taking over a 5 Unit apartment building on a Master Lease Option, and I have some questions regarding the current lease, and some things the current owner has done.
1. The current owner currently collects rent by giving the tenants deposit slips, and they deposit the money directly into his account. Because it is stated in their current lease that this is the method of payment required, am I allowed to require payments using a different method? I'd like to use eRentPayment to collect rent. I know I have to honor the terms in their existing lease, but I'm not sure if payment method is allowed to be changed.
2. For a few of the tenants, the owner collected a full security deposit, but apparently at some point used the security deposit as rent when they didn't pay. When these tenants leave, am I still obligated to provide them with a security deposit, or can I withhold it, since it was applied as rent? As far as I'm aware, neither the landlord or the tenant is allowed to apply the security deposit as rent, unless the tenant as vacated, and there was back rent owed.
3. For 2 of the 5 tenants, the current owner only collected a partial payment of the security deposit. What legal rights do I have to pursue the security deposits, since the current owner has already started accepting rent payments? I should also mention that no where in the lease does it mention they made a partial payment. Does this mean I could actually end up having to refund them a security deposit they never actually paid?
Any advice is much appreciated!
I'd like to find out as well. When I bought my duplex, my realtor told me I was inheriting the lease clauses including the fact that the seller never charged a security deposit or last month rent. When I asked my PM, he said we couldn't establish a deposit until the lease expired.
Anyone? I haven't be able to find very much online regarding this matter.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing