Contractor · Orofino ID, Hollister CA · Member since 2021 · 139 posts · 71 votes
So we are in the process of purchasing a 5 unit multi family property. I'm told by my realtor that we are gonna close early the first week of November. It all comes down to the title company and how busy they are. On Friday October 29th I was talking to my property manager and she asked if I had phone numbers for the tenants. I told her I did not but I had rental agreements for all of them which had the current owners number and maybe it would be best if she contacted her directly instead of playing the telephone game. She promptly did this. To our dismay the current owner got really indignant that we dared to call her in the first place and would not divulge that information. Then the owners real estate agent called my PM and asked her not to contact the owner again. And that the day before closing they would notify the tenants of the new ownership with letters on each of their doors. Is this normal? Did we do something wrong? Should I be worried about something? The PM and I figured keeping the tenants in the loop would be a good thing and help with a smother transition. TIA!
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
4y
After you are the owner. A lot of sellers will get bent out of shape if you talk to their tenants before the sale goes through. While not a written rule you or having your PM contact the tenants prior to you taking ownership or w/o the expresses consent of the owner, or doing a walkthrough etc....is seen as bad form.
In addition it can mess up the order of things when you are dealing with rent due on the first of the month. Now tenants may be confused (or just act confused) regarding who they should pay. Could cause you some delays too.
It seems weird, but my guess is they want to make sure Nov rent is paid. Hopefully you have it in your contract that you get prorated rent for Nov and the security deposits transfer over. As soon as you close, notify the tenants of who they should contact and how to pay Dec rent.
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
4y
After you are the owner. A lot of sellers will get bent out of shape if you talk to their tenants before the sale goes through. While not a written rule you or having your PM contact the tenants prior to you taking ownership or w/o the expresses consent of the owner, or doing a walkthrough etc....is seen as bad form.
In addition it can mess up the order of things when you are dealing with rent due on the first of the month. Now tenants may be confused (or just act confused) regarding who they should pay. Could cause you some delays too.
Contractor · Orofino ID, Hollister CA · Member since 2021 · 139 posts · 71 votes
4y
Thanks for the replies all. The plan as discussed with both realtors was to have the current owner collect the November rents and then hand those to the escrow company. We were more concerned that once the deal closed we would not technically have lease/rental agreements with the tenants. We also thought it would be good to be proactive with the existing tenants letting them know what was going on. After all we did tour the building last week so they know something is up.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Your agent should know better than to contact the Seller directly. The correct, professional method of collecting information is to communicate with the Seller's Agent, not the Seller.
You also have no right to contact the tenants prior to closing. The Seller should contact the Tenants and let them know of a pending sale, but most states have no legal requirement for this. Once you close and the property is yours, you should immediately notify the tenants of the change in ownership. I usually provide them with a simple letter that tells them who the new owner is, how they can contact the new owner or his Property Manager, and how to make payments. I also recommend you include a simple form they can fill out with updated contact information and return to you.
I try to make personal contact with everyone. I also schedule my own walk-through inspection within a week of purchase so I can take pictures to document condition, ask the tenants about any deferred maintenance, or to discuss any pending changes.