Buying with tenants in place

[Justin Owens]

I am in negotiations on a condo with tenants in place. They are paying rent around $100 below market. Sellers don't want to deal with tenants or negotiate anything with them and spelled it out in the contract. 

My plan was to meet with the tenant during the inspection period and hash out a new lease with him bringing the rent up some, maybe $50. Once I am in escrow, while I don't own the property I do have some interest in the property. I assume I would be able to negotiate a lease with the sellers permission. If I put in a line that the lease would only be effective once I take ownership I should be good right?

How do security and deposits get handled? Turned over through escrow to me or handed back to tenant then to me?

[Curt McClements]

I'm not seeing where @Justin Owens said the current tenants are being a pain. Once you take ownership, you should meet with them and have them sign a lease that is either month-to-month, or for a specified period of time. A lease covers much more than the rent amount. It covers payment terms, pet policies, smoking policies etc. If they don't agree to any of your terms, you can give them notice. You can try to get them to sign a one year lease with the rent amount increased by $100 per month. But it's more likely that they'd want to continue with month-to-month with an increase like that.