Going to make an offer on a house in Westerly RI. This is a 3 family but the loan I'm going to use is the Home Possible loan with 5% down. The house is full right now and leases are all signed for the next 10 months.. This would be my first purchase and my primary home. I would have to live there. Has anyone been through the experience of taking over a property and having to remove a tenant to fulfill the duties of the requirements loan? What would be the best way to remove a tenant? Would it be my responsibility or the current owner?
Hey Greg, congratulations on the upcoming purchase! In order to break a tenant's lease, I typically arrange a sit down with them, and ask them what their plans are. Sometimes tenants want to get out of their lease early and you are able to secure an agreement with them, other times you can ask them what it would take for them to leave prior to their lease end date, and there's usually a number that will make it worth it to them. I've seen owners pay from $500-$5000 for the current tenants to leave, just make sure you get an agreement in writing if it does come to this. Good luck!
It's likely to be a requirement by your lender that one unit will be vacated and occupied by you within 60 days of close. My experience is that they will want proof of this before closing and after closing. So you need to make it a responsibility of Seller which may consist of cash for keys that you may have to negotiate as part of the deal.
You can't just remove a tenant, you have to accept their existing rental contract.
I'm a little late here...but there's a section in the purchase and sales agreement regarding tenants and occupants. This can shift the responsibility to the seller to leave a particular unit vacant to comply with your lender's requirements. Keep in mind that this will be factored in when considering your offer.
If the tenants are on month to month leases in RI, the seller can terminate their lease with 30 days notice. Once the seller put the house on the market, he should have gave a heads up to the tenants that are on month to month that there's a chance that the new owner may want some or all of the tenants out.
Notice of Termination of Tenancy. If that doesn't work, then the eviction process would need to be utilized. Or... offer them some cash to leave and remove their things. For that, I would have an attorney draw that up.
If there is a lease agreement in place, you can't just kick the tenants out. You can negotiate something with them, but you can't change the terms of the lease without their permission.