Do I have to honor previous owner's lease?

Question

Just purchased a multi-unit in PA. The units are occupied. Do I have to honor the previous owner's leases/ rental agreements?

Kyle J. · Answer

Yes, leases transfer with the property. So if they’re in the middle of a lease, you’d need to wait until they expire and then you can have them sign yours.

On the other hand, if they’re just month-to-month tenants, you can go ahead and give them notice now that you’ll be switching them over to your rental agreement.

Steve Morris · Answer

Basic principal is that any agreement that pre-dates the sale needs to be honored.  You should've gotten an assignment/assumption of leases agreement also.

Theresa Harris · Answer

Yes they transfer.  Also make sure you get the security deposits and prorated rent from the current owner (and have that written into the sales agreement).  Let the tenants know you are the new owner and how they should make payments.

Joe Hammel · Answer

Yes, buying the property and the lease.

1. Wait until lease is up, then renew/change/ect

2. Offer tenant "cash for keys" (if want them to leave) - or I don't see why you could "ask" the tenant to sign new lease.. they don't have to, since they have a valid lease, but should be that if you mutual agree to stop that lease and start a new, I believe you can.

Tammy Mason · Answer

Check the assignment and successors sections of the lease. But generally, the new owner is buying the property and the existing leases. Very few places include termination clauses in the event of a change in control.

Waleep Alvi · Answer

@Lauren Ruppert yes, you must honor the existing lease. If they are on month to month you often can have the owner give them notice once you clear inspection.

Typically the seller will provide a check for deposits plus interest and prorated rent collected at closing (separate from title company funds).

Your other options are to wait until the lease expires and non-renew (section 8 has some additional requirements) offer to pay the tenant to leave before the lease expires, if they are non-paying or violating the lease eviction may be the option of last resort.

Do I have to honor previous owner's lease?

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