Inheriting 4 tenants, one has to go for us to owner-occupy.

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Inheriting 4 tenants, one has to go for us to owner-occupy.

Landon Fillmore
Rental Property Investor · Anchorage, AK and Utah · Member since 2020 · 50 posts · 30 votes

BP, 

I come to you as a BRAND NEW landlord (we just closed on our Anchorage, AK 4-plex YESTERDAY and couldn't be more excited). We will be owner-occupying/house-hacking it for about a year. It is currently fully occupied and we need to notify one of the tenants that we will be occupying it within the next 2 months. My questions are: 

1. When you inherit tenants, do you need to immediately establish your own leases, or can you continue with the standing lease from the previous owner until it expires? (Any other tips/considerations/suggestions when inheriting tenants, especially multiple at once?)

2. When issuing notice that one of the tenants needs to move out, what is the best way to do that? Today is September 16th and I need them out by October 31st, so I want to give them as much time as I can, and do it all legally of course.

3. I will be rehabbing that unit with mostly cosmetic updates. There are currently some holes in the drywall that will need to be fixed, so should I charge the tenant for that damage and withhold it from their deposit when they move out? 

Lots to consider and learn, but I'm looking forward to it all. Thanks in advance for your help and advice!

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Kyle MccawBusiness Member
Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
5y

@Landon Fillmore

1) the existing lease is still a contract the tenant has. You can ask them to get on an updated lease. But they don't have to. Go through your rent rolls to see who has the worst payment history or maintenance issues. Offer cash for keys if needed to inspire them to leave.

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  • Kyle MccawBusiness Member
    Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
    5y

    @Landon Fillmore

    1) the existing lease is still a contract the tenant has. You can ask them to get on an updated lease. But they don't have to. Go through your rent rolls to see who has the worst payment history or maintenance issues. Offer cash for keys if needed to inspire them to leave.

    McCaw Property Management4.4907 Reviews
    WebsiteView Page
    1Reply
  • Landon Fillmore
    OP
    Rental Property Investor · Anchorage, AK and Utah · Member since 2020 · 50 posts · 30 votes
    5y

    @Kyle Mccaw

    Thank you for the response! I should have mentioned that I already know exactly which tenant will be leaving. Thanks for the input on the leases.

    1Reply
  • Zambricki Li
    Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes
    5y

    Hey Landon,

    1/2) If you are ever carrying any tenants always start your own fresh lease. Begin with a phone call with your new tenants. Get a feel for each one. Maybe someone was planning on leaving anyway. Cash for keys is the simplest way. You need a legal agreement(Legal fee est $5-800). Tenant will in some cases have 30 days to change their mind from the start of the agreement. Just get it all rolling and you will be great. Check your laws specific to AK, you probably have 2-3 options on how to owner occupy this, with different costs attached to each.

    3) No charge. Be cool. It's more fun.

    Congrats!!!

    Zambricki Li

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    5y

    Wow, that title is kind of like hunger games!  Three will stay, one will go....stay tuned.  

    1.  No.  For tenants on a term lease you can ask but not force them to sign a new lease.  they say no you have to honor the exsisting lease for the remainder of the term. As for tips go and say hi.  If you are out of town, email/call/text/send a letter to intro yourself and tell them the basics, where to pay, how to reach you etc.....

    2.  Well, you need 1 of them to be on a month to month lease and be willing to leave.  If all 4 are on a term lease and they don't want to leave you are actually the one not moving in.  If they are on term or month to month you can ask, you can offer cash for one to leave but if they refuse you need to go to the courts.  

    3.  You have proof the tenant caused the damage or was it there on move in?  If you don't know you shouldn't charge, although some would advise you charge and let the tenant complain.  Going to be a Personal matter.   If you end up in court over this you need proof.

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  • Zambricki Li
    Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes
    5y

    @Scott M. thanks for clarifying that is a very important distinction 1)@Landon Fillmore New lease is an ask, it's their choice to refuse..it does not hurt to ask. It's the spirit. I've had good luck with this type of multi. Just be real w/peeps. Sure, if it's 100 units things change.  I don't alter the terms just ask to use my template. They may have something funky in their current one. So you can always read it and make the call if it matters to you.

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  • Landon Fillmore
    OP
    Rental Property Investor · Anchorage, AK and Utah · Member since 2020 · 50 posts · 30 votes
    5y

    @Zambricki Li @Scott M. thank you both for your insight! I'll likely notify them that their current lease, and all terms therein, will just be upheld until they are up for renewal. Luckily one of them is on a month-to-month and I'll be taking over that unit in November. This was helpful, thanks again.

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    5y

    Don't forget you can ask.  Nothing wrong with asking those on a term to sign a new lease.  Quite a few do and have no issues with it.  All they can do is say no : ) 

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