New Landlords, Existing Tenants
We are currently negotiating a triplex in foreclosure in the Phoenix area. All three have current tenants and are on a month to month contract. We want to update these contracts since we are going to be the new owners of this property. What do I need to do or how long do I have to wait till I can update with new rental agreements.
We are buying a 4-plex. Three of the units are on month-to-month. We are going to tell them if they sign a 1 yr lease we will buy them all newer gas stoves(the ones the previous landlord provided are straight from the 60's)
Quote:
On 2004-11-08 18:26, rbisaveshomes wrote:
We are currently negotiating a triplex in foreclosure in the Phoenix area. All three have current tenants and are on a month to month contract. We want to update these contracts since we are going to be the new owners of this property. What do I need to do or how long do I have to wait till I can update with new rental agreements.
You need to check your local regulations. You can find this information online or by visiting a property management company. In Ohio you must give thirty days notice of any intent to change an existing month to month agreement. This must be specific as to the changes, their effective dates, any changes in amount, and of course it must be in writing.
Good Luck,
Shawn(OH)
Thanks for the helpful info loanwizard.
If the only things you want to change in the leases are the property ownership details, you can just send them a letter informing them of the change. If you want to change more than that, then as per Shawn's suggestion, you need to check your local laws. Most likely, you'll just need to give them 30 days notice of any changes.
Ruman - Make sure the tenants understand that the new stoves are being purchased for the units, and are not going to be the tenant's personal property. It seems obvious to you, me, and most everyone else on this site, but your tenant's might view things differently if not explicitly told otherwise.
I would recommend that you be sure what you think they are paying in rent is what they are really paying. What a nightmare my husband and I have been going through. We have bought about 20 houses from one investor getting out of the rental business. All the closings were over a one month period of time. We never saw the leases but relied on what the owner said. (stupid I know) This was someone that is supposed to be an upstanding pillar of the community with his peers but considered a slum landlord among his tenants. One house was supposed to be rented for 625 a month. When she originally leases it she did pay that but because he didn't want to do any repairs at some point he agreed to take just 500. (she is not lying) We would have never bought the house if we had known. We need the 625 to make it worth it. Right now we are going round and round with her. She intellectually understands but emotionally she doesn't. She wants all these repairs if she is going to pay the 625. Of course she is trying to make us feel bad with "I'll be homeless for Christmas" etc.
With another house we were shown a bogus lease that unfortunately we never got a copy of and once the house was bought we found out the tenant was actually paying hundreds of dollars a month less than expected. Like I said - a nightmare. So everyone be careful and check things out with the tenants before you close on the deal or you might be very sorry after the fact.
BBC Properties,
Did you review his tax information that he filed yearly to see if that information jived with what he was telling you?
Corey,
No we did not review tax records. This has been a very expensive lesson to learn. Seems like i have to learn them the hard way - haha.
I will never again buy a single family rental or any size apartment without having the rent verified by either the tenant's cancelled checks or signed papers by the owner and the tenant about what the rent really is. I will never again take ANYONE'S word for that. I don't care who they are.
Getting the information in writing goes a long way. What we have done in the past as well, is the first thing we do once we acquire the property is go meet the existing tenants. We give them a "Welcome packet". In this packet is a few things:
A welcome letter explaining to them who owns the property, and some of the "non-negotiable" things (for example, rent being paid ON TIME). We also have a statement saying the terms of their current lease will be changed in 30 days. We give them a copy of the new lease we have all new tenants sign. We also have them fill out an "updated tenant information form". On this form, it asks for pertinant information you would typically gather on an application (name, phone #, how much current rent is, how much security deposit, how long they have been there, etc). We also have them fill out a "property inspection" form. This is a form they fill out within 7 days when they tell you what the property is like, and if they have any current issues with the property.
We do all of this basically to set them up for when they sign the lease, and it also shows them how we do business. If they want out, they have notice. If they want to stay, this setup helps them understand what to expect.
Hope this helps,
Chris