Buying a rental with current renter in place

4 Replies

What do you do when you buy a property with a lease with 6 months remaining?  I have read over the lease and it's basically the exact same as what I would draft up.

Should we just tear it up and write a new one, since my company is not on the lease?  I have met the tenant 3 times and she has no intention of leaving anytime soon.  She is happy with the current terms and so am I.

You wouldn't "just tear up" the lease because you are now bound by it and have to honor it.  Doesn't matter that your company is not named on the lease.  Fortunately, it sounds like you and the tenant are both agreeable to the existing terms and conditions of the lease.  However, if you decide you want to change the terms after the lease expires, that is when you'd do it.  The tenant would then have the option of accepting your new terms or moving. 

(Side note: It is possible to change the lease, or have the tenant sign a new one, prior to the current one expiring.  However, both of you would have to agree upon it and if for some reason the tenant refused, you'd still have to honor the existing lease.)

@James Maher  

@Kyle J.  Beat me to it. 

Do not "tear up" the current lease as it would transfer upon sale.

You should complete a Tenant Estoppel Statement as part of the sale.  It protects you, the seller and the tenant and helps to memorialize the accuracy of the existing lease going forward.