I am closing on a three unit property in the coming weeks. Each of the units are currently occupied with longer term tenants (4+ years). I will be owner occupying this property and need to give notice to one of the tenants (I am actually planning on giving notice to two of the tenants, as I have a old tenant that was great who is looking for a bigger place). What is the best approach to giving notice to these tenants. Should I have them sign a new Month to Month agreement and then serve them the 30 day notice? Does anyone have guidance surrounding the first steps to take when purchasing a property that is currently occupied. Do you have the tenants go through your rental application and require them to purchase the background check/credit check?
Thank you for your Insight!
Just went through this scenario on a 10 unit deal I did. Assuming they are all on expired leases aka month to month I would just have a human conversation with them about the scenario. Let them know you are going to occupy the unit and bring in an old tenant. If you are going to up the rent, I would certainly give them the chance to stay if they agree to pay that number. Work something out person to person that allows them enough time to find a new place, and you to get settled. If they refuse to move, then the 30 day notice can come into play.
I would not sign a new month to month, assuming your state defaults to month to month an expired lease agreement. I would not sign anything new, other than an agreement with a date for them to move out.
I have not conducted new background checks in the past, although that is probably a good policy for month to month tenants. In our state, if they are on a current lease, I couldn't remove them until expiration even if they didn't meet my standards.
I’m in the same situation, I’m having tenants go through all the motions. I also raised the rent. Tenants have to do the Application, financial details, lease agreement, check in / Check out sheet etc. good to have something in writing when taking over new property that is currently occupied. You have to look out for yourself.
Have the seller give notification to them that they need to be out before you take over. You shouldn't have to deal with this at all if they are on month-to-month leases, or have no lease. And write that into the purchase agreement. If they have longer term leases then you will probably have to honor those leases, then give them plenty of notices (60+ days) to not renew their lease.