Urgent question- Tenants sign new lease prior to closing?

9 Replies

This is the counter offer I received:
We want to counter your offer in hopes we can work with you. We have requested highest and best and the other offer is higher. With that being said we would prefer to work with you because you do not intend on occupying the property and this would not disturb the tenants, which is of benefit to you and the seller. Below is our counter to you. Please let us know by 5 pm today. thanks and we look forward to your response.
Conditions are price, selling as is, reasonable closing period and then:
"Tenants to sign new leases with buyer prior to closing."

This strikes me as weird. I thought leases carry over with a purchase? The seller told me everyone was on a lease, would you guess that this was not true? What do you think is going on here?

You get estopell letters specifying deposits terms etc. of the current lease and signed by you and the tenant. The seller has to transfer the deposits. at closing. You are not collecting new deposits out of these tenants. They also transfer prorated rent at closing. Ask your lawyer this should be good enough and i think can be written to start at closing but signed before.
If that statement that leases do not need to be honored by buyer is true then I would get month to month aggreements only. To be accurate leases do not "transfer" per se, I believe in most states as a buyer you need to honor the terms. Talk to a lawyer, they may know more or consult state tenant regulations. I would want to see in writing.

Regardless the law, if the tenant's agree it's always a good idea to sign a new lease anyway. 

This way it will be your name on the lease not the previous landlord.

Don't forget to ask for, pay stubs, copy of driver license, etc.

I had situation in the past with inherited tenant with no info. You need this info for future legal action. garnish their wages, etc.

In the state of Washington, once a property is under contract (all negotiations cease) when it comes to the tenants! If the seller signs new leases without the buyers approval then the buyer has the right to terminate the transaction, get their EM back and possibly sue for costs incurred while under contract agreement! Seller has to abide by the agreements and has to keep buyer aware of all issues while under contract!

Tenants can NEVER sign leases without the buyer (taking title) to the property! It's like telling a seller, please sign the title over to me so I can get the loan on the property! <<< dumb idea >>> Once the title has been signed over the buyer OWNS THE PROPERTY without any loan! That will hold up in a court of law! If the seller is so ignorant that they would do this then say good bye to your property.

I would just ask for clarification as to why they want to sign new leases. Rather than being malicious it could just be the case of an owner who is friendly with the tenants. If you are concerned run them through the rental application process, get copies of the current lease and documentation the rent is being paid on time. Make sure the rents are at market rate and I also wouldn’t agree to anything longer than a 6 month lease.