I am looking to put an offer on a 4 plex in the next couple days. The listing agent provided me with the current leases for all the tenants, and I noticed 2 of the contracts expire in about 20 days. Rent has risen drastically in the the area over the last 2 years, and I was counting on raising rent a bit on 3 of the units including the ones with contracts expiring right before I take ownership. One of the tenants has been in for a long time and I am wondering what could stop the current landloard from theoretically lowering the rent 15 days before I take ownership?
Can I write anything in my offer letter stating that the offer is based on no new contracts or contract modifications being negotiated with any tenants from the date the offer is submitted until I take ownership?
Don't worry about any of that. If the tenants leave, just set the rent where you want it to be.
You probably want them to leave anyway so you can do your own screening.
Thank you for the response Rosston. my concern is not the tenants leaving. I would like them to stay, but I know the property will rent easily. The current landlord currently has all 3 year leases, 2 of which are over 15 days before I would take ownership of the property. I am worried that the current owner will sign two new 3 year leases at $200 less than what I am going to ask, and was wondering if there was any legal way to prevent this from happening, such as writing it into the offer?
Why would the owner do that unless he the one living there himself. You can add anything to the contract. It best in writing. Talk to your realtor or lawyer have them add it.
@Cody Harmon I would for sure have your agent draft up an amendment (change to the contract) stating the seller is allowed under no circumstances to sign any new leases. This should not be a problem since you do have an A.O. and I would assume he gets where you're coming from with this
@Carter Crowley is spot-on. Make certain the contract to purchase clearly spells out that the seller is not permitted to sign a new lease with anyone without your explicit permission.
But in your case, see if he'll talk the current residents into staying on a month-to-month basis until new ownership is complete.
My bet is at least one of the two have decided they won't be staying past their lease. And that's one of the reasons the owner decided to sell. He/she just doesn't want the hassle of making the place rent-ready.
Condition of offer to include that all present tenants continue on M2M at expiration of present leases.
Owner not to sign any new leases.
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