Investor · Greater Boston, MA · Member since 2018 · 11 posts · 0 votes
Hi BP,
Have an offer in on a MFH (competitive bid situation) and I have just received the existing 3 leases (that expire anywhere from 30 to 120 days after I take possession).
I'm not crazy about how the leases are written:
1. Obviously not written by an attorney (I'm the daughter of one....I'm picky about my contracts)
2. Includes internet and Direct TV, both of which I want to discontinue (internet I am on the fence, but no way on Direct TV...I don't want that service transferred to my name nor pay for setup).
3. Lumps together water/sewer (building utilities) and individual unit utilities. (not a deal breaker, but badly written).
4. Allows for tenants to change locks (after written consent). No way.
But it's mostly #2. I don't want to get into a new contract with Direct TV for my tenants. And I'm undecided about if I want to give them internet. But, is this basically 'the price of buying with existing tenants'?
I do want to evict all the tenants as I want to move into 1 unit and the others need some repairs/updating. So I'll have new tenants (and strong leases) within the first 5-6 months of ownership under my terms.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
@Jennifer O. Those leases are expiring soon anyway.......just send the tenants notices of non renewal giving them the appropriate notice. Unnecessary evictions just create expense and headaches for the LL. All the best!
I like your assessment of the existing leases. In my area we are required to honor the existing leases until they expire. On MTM lease you can give 30 day notice, no questions asked. I would not pay for direct tv or internet on a 3 unit. You can meter units individually and charge tenants. Check with your state laws and city if applicable.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
@Jennifer O. Those leases are expiring soon anyway.......just send the tenants notices of non renewal giving them the appropriate notice. Unnecessary evictions just create expense and headaches for the LL. All the best!
Investor · Greater Boston, MA · Member since 2018 · 11 posts · 0 votes
6y
Sorry, allow me to be clear. I will not be renewing the leases. I will not be evicting the tenants. Sorry.
The question still stands about internet. I don't want to take over a crappy Direct TV and cable contract (and probably won't provide this in the new leases).
But is taking over/transferring the existing cable contract (to honor the leases) just a 'part and parcel' with passing title (particularly since there is not a lot of time left on the leases)? Can I force the current renters to change their existing leases to be responsible for cable/TV (which seems like a PITA with 0-120 days left on their leases).
It's a multiple bid situation (and with a non-savvy property owner who inherted the property in an estate) so I don't want to make it too crazy onerous.
Rental Property Investor · Inglewood, CA · Member since 2015 · 24 posts · 12 votes
6y
@Jennifer O. You'd have to check your local/state laws. In California, we have to honor the existing lease unless they decide to sign a new lease. Here, if you want to remove items (such as Direct TV, internet, parking, anything named in the lease) then you would have to discount their rent by a"reasonable" amount. Getting free Direct TV and internet sounds like a sweet deal though. Seeing that this is a future property and that you don't know the tenants, I'd run the numbers taking the cable tv payments into the calculations. If it turns out the tenants are ok giving it up then it's a win but otherwise you'd account for it and not add it on future leases. With multiple bidders it makes it even harder but you may be able to ask the Seller for a credit to cover the costs for the next year or two...
If you do get the property you can look into coupons or deals for being a new Direct TV customer or change the service to something cheaper. Good luck!
I'm assuming this state is the same and that I don't want to monkey with tenant leases so close to non renewal. I'm thinking I'll insert a clause into the offer that:
1. Requires the current owner to provide a copy of the cable/TV contract and current month invoice
2. Require the current owner to maintain the existing service, in his name, thru the end of the last lease (and I'll reimburse him at closing for those 4ish months of service). Seller to cancel service and have all dishes and wires removed within 30 days of the end of the last lease.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
6y
Geez lady ,Your worried about direct tv on the lease lol that’s the least of your problems as a landlord ! The leases run out soon so just chill out . Sounds like maybe this gig isn’t for you
Geez lady ,Your worried about direct tv on the lease lol that’s the least of your problems as a landlord ! The leases run out soon so just chill out . Sounds like maybe this gig isn’t for you
@Dennis M, I have owned MFH and SFH rentals before but I've always demanded them to be delivered vacant with no transferrance of services. In this situation I am forced to take on the existing tenants for a short period and kindly asked what others have done in this situation.
Rental Property Investor · Chicago, IL · Member since 2017 · 219 posts · 180 votes
6y
Being that the leases are very close to expiring start sending out the non renewal letters now so they can prepare and you can word as the building needs major updates that requires the unit to be vacant. That will solve all your problems right there. Start fresh on your terms
Investor · Greater Boston, MA · Member since 2018 · 11 posts · 0 votes
6y
@Andre Taylor, Thank you Andre. I cannot (and would never) communicate with the tenants that until I am the legal owner of the property but the P&S has strong language that no lease can be amended, extended, colored blue, etc.
And the first day after my hand recovers from signing on the dotted line, ya betcha that the non renewal notice will be hand delivered to the tenants.
Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
6y
This is par for the course for most of us, especially if they are long-term tenants who the prior owner coddled so they wouldn’t move. I always just have to wait it out. Make certain that as part of the deal the current owner can not renew any leases at all.
You could always drop them down to the lowest package possible and ride out their leases. Won't help you with your tenant-landlord relations, but its certainly an option. For 4 months max it doesn't sound like a deal breaker if the numbers still work. Rather then keep the contract in their name after close, which they could very well cancel anyway, I would ask that the owner prepay through the end of each lease at closing. Contact the local provider to see how they have handled the transition in the past and what your options are. With multiple offers and an inherited landlord I would try to make this as simple as possible for them.