Does tenant sign new lease when you purchase

Question

When you purchase a property with a tenant currently living there do they need to sign your lease agreement even if the rent remains the same? What about if you’re planning on raising rent price when you purchase?

James Wise · Answer

Typically by law you must adhere to the existing lease. That said, so long as you keep the rent the same I have found the overwhelming majority of tenants have no issue voluntarily signing a new lease with you once you acquire the property. If they are willing to sign a new lease with you, you need to make sure you do it ASAP. Makes things much easier in court if there is a problem with the tenant down the road.

Ryan Wiebe · Answer

@James Wise thanks 👍

Kenneth Garrett · Answer

@Ryan Wiebe

That depends on state or city law. In my area you are required to honor the existing lease in place. Once the lease ends then you can develop a new lease and raise rents just like a typical lease. A MTM lease requires 30 day notice by either party to end the lease. If you want to raise rent on a MTM again a 30 notice is required. Check your state law.

Marc Winter · Answer

@Ryan Wiebe,  In most jurisdictions, the lease survives the closing.  The tenant has no obligation to sign a new lease, but if you ask, they often will.  Make sure your lease covers everything; that's easy to say, but impossible to execute.

Bless their hearts, tenants continually come up with new ways to show you that no lease can cover all their actions or lack thereof.

One word of advice--read your state's L/T laws.  Study them.  Know more about those laws than a 'professional' tenant may know.  Then at least you have a fighting chance.

Good luck with your venture!

Michael Noto · Answer

@Ryan Wiebe In CT you would inherit the previous owners lease and you can only change the terms of the lease when they are up for renewal or if the tenant agrees to rip up the current lease and write up a new one. I am sure your state has similar parameters.

First I would identify what kind of lease the current tenants are on. If they are on a month to month lease you have a lot more flexibility to do what you are trying to do.

Theresa Harris · Answer

You need to honour the original lease until it expires. I would have them sign the lease with your (same terms and expires at the same time), so that they know you will also abide by the terms of the lease AND they know who to pay and contact for repairs/emergencies.

Does tenant sign new lease when you purchase

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