Missouri - Buying an occupied multifamily, what can change?

Question

Helping a client buy an occupied multifamily and he may want to change some things about leases after close. I've never actually done this, always just rode the leases out and then renewed on my own contract. So, questions:

- Must the current leases be honored in exact terms? (not wanting to kick anyone out, but may want to adjust policies)

- If someone is in a unit on a lease that expired a long time ago, I assume we can put them on a new lease after close.

- Even if we didn't change policies or terms, can we update the existing leases to the buyers preferred contract if the basic tenant cost and amenities, etc don't change?

Where are the boundaries and guidelines here? Is there a common approach to

John Ching · Answer

Hey Lynne, good to see you on BP!!

Anyhow, to answer your question, I believe Steve is correct. Current leases must be honored. Leases that have expired become tenants-at-will, which means unless specified otherwise, their tenancy is month-to-month. Your client can have them sign new leases or give them 30-days notice to vacate.

If your client is not changing policies, terms or guidelines, I don't see a need to, "update" their current leases. Is there a reason he/she wants to update the leases?

Keep in mind, I am not a RE attorney (haha, gotta throw in the disclaimer!), so take that for what it is. But I did just pass both 40 and 24-hour State RE exam prep courses! (That and $3 will get you a coffee-of-the-day at Starbucks)

I'm sure someone in your office has specific multi-family knowledge of leases and terms. Let us know how it goes.

Best regards!

Steve Ipock · Answer

Scratch the home red. I meant honored. Auto correct!

Steve Ipock · Answer

When I say this I'm assuming the lease is like most all & must be home red by all successors. He can force anyone that has an expired lease to sign his or move. If it's a big deal to him he can likely just get them to sign his lease & it's a done deal. If it's worth it he might even offer them something like a rent concession to sign his. Ultimately if they say no then there's basically nothing he can do but ride it out. I worked for some large apartment buyers for years & we couldn't force them to sign our lease until the lease was up.

Missouri - Buying an occupied multifamily, what can change?

3 Replies