Do I Have To Honor This Lease?
I purchased a property with tenants already living in the property. My realtor asked me whether or not I wanted to tenants to live there after I purchased. I dont want them there. I can get way more rent from someone else if I move them out.
A couple of days after talking with my realtor about this, he comes back saying that they have already signed a lease and that I HAVE TO HONOR the lease until it is up in Jan. Is this correct? He didnt sign the lease with me... doesnt there have to be a new lease involved? Im confused... please help... I am thinking about backing out of this deal..
With this tenant cash flow is only $70 if I can get someone new in there it will be about 150 or 200 :-?
Yes you do. You can always try to have them sign a new lease with you, but they are under no obligation to do so. I always find out the lease status prior to buying and make a statement in the contract "that all new leases need to be approved by me" in order to protect my cashflow. Maybe you could "sweeten the pot" so to speak to get them to sgn a new lease with you. Offer some sort of incentive.
Does this mean that I get the first and last months rent or deposit if ever collected by the current owner?
that would be correct.
Thanks for the info guys... this site always makes me feel better about starting in this business.
First of all, read the lease. It may allow you to raise the rents durring the lease period.
This is kind of a squirly thing to do, but you could approach the tenant and let them know that you are the new owner or manager and that you are willing to decrease their rent by $10 a month. Turn it into a Month-to-month lease OR put in a provision that you can increase their rent durring the lease period. After they agree to terminate the other lease and sign a new one (both of you should sign a termination agreement), you can raise their rents or not renew their lease.
Like I said, Squirrely, but legal and it takes care of your "problem".
"Does this mean that I get the first and last months rent or deposit if ever collected by the current owner?"
Depends on your contract and where you live. I suspect that the general answer is no, not unless you put that in the purchase agreement. Even worse than that - not only did you not get those deposits, the tenants still get it back from you when they move out.
(The real answer is probably to say something like "The rules about this sort of thing change from city to city, much less state to state. You need to get local professional advice."
Quote:The real answer is probably to say something like "The rules about this sort of thing change from city to city, much less state to state. You need to get local professional advice."
jamespb,
The real answer is "Your tenants are entitled to the security deposits they paid."
Security deposits are simply held in escrow by the landlord and are refundable when the tenant terminates the lease. You should receive an assignment of the deposits at settlement or as a credit on your HUD-1. If you fail to collect them at settlement, you (as the new landlord) assume liablity to your tenants for the deposits.
If you have not documented the amount of the security deposits as part of your due diligence, it may be difficult to establish your entitlement to any amount should you decide to go to small claims court over this issue.
The time to resolve all this is before settlement while you have the maximum leverage.
I'm confused. You say "I purchased a property" but then you conclude "I'm thinking of backing out of this deal". Do you own this building or not? How are you going to back out of a deal you've closed on?
Mark
Sometimes we forget...Contact your attorney ASAP.
Eric & Rosa
[addsig]
My property leases have a clause in them that the tenant must give 30 days notice prior to vacating. Failure to do so makes them responsible for paying that month's rent. I also have the ability to give the tenant 30 days notice to vacate, which I usually do if they are late with their rent payment more than 1 time. My state, Ohio, has a 3 day notice that must be given in order for the tenant to rectify any late payments, unpaid utilities, violations of the lease agreement, etc. If they fail to correct the problem, I can file a Landlord's complaint with the court and can usually have them out of the property within 4-6 weeks. If I were you, I would make sure their payments, etc. are on time and if not, I would use your state's laws to evict them and then you can put a renter in that would increase your monthly cash flow.
Quote:
On 2004-03-26 21:08, mikepor wrote:
My property leases have a clause in them that the tenant must give 30 days notice prior to vacating. Failure to do so makes them responsible for paying that month's rent. I also have the ability to give the tenant 30 days notice to vacate, which I usually do if they are late with their rent payment more than 1 time. My state, Ohio, has a 3 day notice that must be given in order for the tenant to rectify any late payments, unpaid utilities, violations of the lease agreement, etc. If they fail to correct the problem, I can file a Landlord's complaint with the court and can usually have them out of the property within 4-6 weeks. If I were you, I would make sure their payments, etc. are on time and if not, I would use your state's laws to evict them and then you can put a renter in that would increase your monthly cash flow.
Actually, in Ohio, the 3 day notice is a notice to vacate, not a time to rectify rent payment or anything else. As a landlord, once you file the 3 day notice, you don't have to accept any money, because the lease has already been broken. The next step is a 1st and 2nd cause of action which is an action for forcible detainer (right to your property) and monetary damages.
Good Luck,
Shawn(OH)