How To Transfer Lease When Buy Properties
Hello, I will close on my first investment property 10 days later. It is a 2-family, and one unit has been occupied. The tenant of that unit signed a 5-year lease last year. Before I signed the P&S, the current owner and his agent said I can't change the lease or re-sign it with the tenant but just use the existing lease; The seller also said he will give me the tenant's security deposit, last month rent and prorated rent at the closing. Today one of my friends who worked in a law office before suggested that I sign an agreement with the seller now which includes:1.the seller needs to transfer the lease to me or ask the tenant to sign a new lease with me; I can't just use the current lease;2. the exact amount of security deposit,last month rent and prorate rent that the seller will give to me. I am not sure whether it is necessary to write this agreement. Shouldn't the transfer of house automatically transfer the lease?(My friend said not necessary.) In the P&S, it mentioned that the seller "shall transfer all the security deposits and rent prorations at the time of closing". Isn't that good enough? Or all the numbers should be on the paper in case any dispution at closing? I don't have my own agent so can't find the answer. Any of your input is highly appreciated. Thanks a lot.
Yes, you are obligated to fulfill the lease as it exists. However you and the other party (tenant in this case) can modify, amend, or even cancel any legal agreement at any time - should both parties so desire.
If you are satisfied with the lease, then you shouldn;t worry about it.
But on the side of caution, I would encourage your to have both the tenant and current owner sign (notarized) a simple letter stating the current security depostis, last month;s rent, and any other key features of the lease - we just had a situation where the seller turned-over $2500 security deposit to us, and the tenant claims the deposit was $3500 - Sure wish I would have had our letter signed by all parties proir to closing on that house.
Thank you very much. So you meant I don't need a letter or agreement saying that the seller transfer the lease to me?
If you are using a realtor - they will most likely want to use their own contract... It protects their interests in the deal... The Real Estate Agent I use will not use any other contract other than the one she has. I've done this and then when the contract is in attorney review, my attorney rips it apart and the sellers attorney reviews/approves the contract. That's what the Attorney's Review is for!
Good Luck!
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