Real Estate Investor · WI · Member since 2013 · 11 posts · 2 votes
Closing on a duplex in two weeks and one of the units is still occupied. I have been told there is not a lease in place. Any advice on how to handle? Should I let him stay with new lease? Screen him as if he was a new tenant? Ect
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
@Korey Enstad when people say there is no lease, that is not really an accurate statement. There is always a lease, so they likely mean one of two things:
1. There is no lease term in effect. The tenants original term may have expired and the lease went month to month. Or the original lease was month to month. The point is that there is a written lease, just not a term. The terms of the lease would transfer to you as the new owner. I say terms meaning a lease contains many things beyond just a time period.
2. There is no written lease, meaning the tenant never signed anything. Since the tenant is living there and paying rent, it is a verbal lease. Lack of written lease is very dangerous because it comes down to a verbal agreement between two people.
In either case, I would have the new tenant sign a new lease. Have them sign a month to month lease, so you have recourse to non-renew if they cause trouble. I wouldn't make them go through screening. I am not sure that is even legal in many places, because they already live there.
I agree with talking to the tenant. How long have they been there, any plans to move? Hopefully you found out if they'd been paying on time and confirmed rent and got the deposit from the seller.
I'd have them sign a new lease, so that you both know what the expectations are. If they want to do month to month or a 1 year lease, get them to sign it either way.
Property Manager · Cleveland, OH · Member since 2019 · 446 posts · 566 votes
6y
No written lease whatsoever is no good. If possible, have the seller get them on a month-to-month written lease before you close. Even better if it's your own lease language rather than his.
Of course before any of that, get written records of his rent ledger and tenancy history.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
@Korey Enstad when people say there is no lease, that is not really an accurate statement. There is always a lease, so they likely mean one of two things:
1. There is no lease term in effect. The tenants original term may have expired and the lease went month to month. Or the original lease was month to month. The point is that there is a written lease, just not a term. The terms of the lease would transfer to you as the new owner. I say terms meaning a lease contains many things beyond just a time period.
2. There is no written lease, meaning the tenant never signed anything. Since the tenant is living there and paying rent, it is a verbal lease. Lack of written lease is very dangerous because it comes down to a verbal agreement between two people.
In either case, I would have the new tenant sign a new lease. Have them sign a month to month lease, so you have recourse to non-renew if they cause trouble. I wouldn't make them go through screening. I am not sure that is even legal in many places, because they already live there.
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
6y
It's been my practice to keep these tenants for 3 months and monitor them closely. If I don't like them I give them a 30 day notice to quit but if I do like them I will insist that they sign a new 12 month lease and possibly increase the