New owner lease agreement

3 Replies

I am purchasing a duplex and close soon. the realtor is saying no revision is made to the lease agreement that is currently in place until their year lease is up. That I just tell them my name and the address where to send the rent checks. Is this correct? The previous landlord had them mailing checks but I want an automatic payment directly to my bank account, so this will be entirely a new process for the tenants. Is that feasible or should I continue the way that the tenants are used to?

Hi @Tina Trussoni and welcome to BiggerPockets!

Your tenants had a binding lease agreement with the previous landlord, and your purchase of the duplex doesn't negate this. So no, you can't force them into using a new automatic payment process.

However, you can incentivize them...

There's nothing stopping you from offering the tenants something of value to them in exchange for signing an amendment to their existing lease that requires rents to be paid as you prefer. The incentive might be an upgrade to the unit (new carpet, a new appliance, etc.) or cold hard cash available upon signing.

Just be certain that your amendment includes language that gives you a way to ensure continued use of the new system. You don't want them signing up now to gain the incentive, and then unsubscribing next month to go right back to the old method.

You cannot change the terms of an existing lease agreement but you can obviously change the form of payment or where payment is made.

I recommend typing up a simple introduction letter that shows you are the new owner. Include instructions for payment and communication. If the tenants are willing to sign a new lease, do it. You can always change the terms of a contract as long as all parties agree in writing.