Inherting Tenants - No Lease or Security Deposit

[Aaron Nelson]

Hey BP community,

I am under contract to purchase a duplex in Western Washington (state) but am still able to get out of the agreement if necessary. Both units are occupied but because the tenants are related to the seller, no formal lease agreement was put in place and no security deposit was collected upon move in. These seem like red flags to me but perhaps I am over reacting? I am sure others have run into similar issues so I'd love to hear some tips/tricks on how to proceed in this situation. 

Am I able to put a formal lease in place contingent on my purchase of the property before the sale closes or do I have to wait until after since I do not technically own the property?

[Wade Sikkink]

You can't put a lease in place until you own the property.  However, once you've closed you can approach the tenants with a lease agreement and security deposit requirement.  If they refuse, hand them their 30 days notice (or whatever time frame is required in WA).

Otherwise, you could require the seller to make the building vacant before you close or else you walk away from the deal.

Good luck.