Asking For Security
I'm in the proces of purchasing a three family house and I was told by the current owner that the tenants didn't pay them any security. Any suggestions on how to collect the security from the current tenants. :-?
Okay, first of all, when you go through the property, speak with the tenants. Tell them that it's your understanding that they do not have a security deposit. You may see some raised eyebrows. Although it certainly does happen, it's uncommon for landlords to accept tenants without a security deposit of some sort. So just to make sure that the seller is being honest, check with the tenants. Also, ask your attorney to draft a letter asking the seller to confirm in writing that there are no security deposits.
But if it turns out that there really are no security deposits, you need to do two things. Check the current leases and your local laws. NY doesn't have any unusual laws as regards security deposits. And since your property is smaller than 6 units, you don't have to worry about paying interest on the security deposits. If the tenants are on a month to month contract, then it's easy to ask for a security deposit. If they're on a longer term lease, then you can't ask for a security deposit unless it's stated in the lease that there should be a security deposit.
Now, if you've determined that you can legally ask for a security deposit, you have one of two ways in which you can do that.
1. Ask for it all at once. Although you might find some tenants that will be willing and able to suddenly pay you the full security deposit, chances are this method will lead to clearing out the property of current tenants. That may actually be an interesting option for you, so keep it in mind.
2. If you're more interested in keeping the current tenants, then a more workable option is to inform them that you are requiring a secirity deposit and would like to work out a plan with each tenants to get this security deposit fully funded. Then negotiatiate with each tenant to have them add $50 or $100 to each rent payment until they have provided you with a full security deposit.
Good luck.
:-D
Thank you very much, that was a very good answer and I am glad I asked.