Hi,
I need advice. I live in pennsylvania, and am purchasing a property for my children to live in while they are in college. the problem is there are 2 tenants in the home, and if 1 doesn't go, there isn't enough room. So- the current owner is giving notice to the one tenant with a month to month lease. the other tenant has a yearly lease. I am fairly certain I know the answer to this, being that my husband is a property manager and I have been a landlord before, but when we purchase the property, I am allowed to change the lease- am I correct on that? I am also allowed to change the rent. I am confused because the realtor keeps telling me I have to abide by the current lease, which is a ridiculous piece of paper that legally means nothing, and I did not enter into it. I took a real estate class, and was taught that once the property sells, all bets are off and it starts new. Help

It seems to me that the easiest course of action is for the current seller to agree (as a contingency on the contract between the two of you) to buy out that tenant so that the issue will be resolved before closing.

If the seller will pay that tenant an additional $500 and forgive a month's rent (in addition to returning the security deposit), I would imagine the tenant would be properly motivated to move out so that you purchase a unencumbered property.

If the seller isn't willing to agree to that contingency, this situation would be worth your time/money to consult with a real estate attorney.

Nope, unfortunately, your Realtor is right. You may not have entered into the contract, but you except that contract when you close on the building. The tenant has a legally binding document. But once that lease expires, then it's fair game for what you want. At least that's how it is where I live, and how it went when my landlord sold our apartment building.

BTW, an eviction process can takes months. Just because its a month to month lease, if the tenant will not leave on his own, they will have to start the eviction process.

I do have to add though, to check the verbiage of the contract. Check and see if it says anything specific about what would happen if the landlord should sell the house.

Yes leases run with the property. I have seen solutions in investment properties with tenants. The seller negotiating with the tenant for an early termination of the lease and the buyer assuming the tenant leases. You can cetainly make contingencies requiring the seller to do whatever your desire -- will it work? - maybe --maybe not.

OP, you are WRONG. Even after sale, all leases are still effect and you must abide by them or pay the consequences.

On a month to month rental, it doesn't take that long to get a renter out but you still need to follow all Landlord-Tenant laws in your jurisdiction in doing so.

As for written lease tenants, you can raise rents/change terms upon expiration of their rental term, but once again, follow L/T laws.

PS. If you do indeed buy this property and have at least one tenant during this time, would you want them to treat your lease "as a ridiculous piece of paper?" I doubt you really meant that!

This message has been edited. Last edited by: Idaho Resident,

what I meant by "ridiculous piece of paper" is that the lease that I will have to abide by is not a proper lease. It essentially is a few paragraphs, no contingencies in the event the property sells, or rules etc etc. It's something somebody sat at a typewriter and said "gee, I think I'll put this in the lease". It truly is a meaningless piece of paper for the most part, which is why I have a problem assuming it. I would want in place a proper lease written by an attorney. for example, no smoking and no pets- my son has allergies and cannot tolerate them. However the tenant I will have to keep smokes. like a fiend. the current owner is starting the process with the month to month tenant, and by closing the only part that would be left is if she doesn't leave, I will have to do the sheriff thing and remove the property from the apartment and store it. it's an adventure, and I guess I'll find out what's going to happen. I just know when my husband sold their property, the new owner went through with all new leases, and anybody who didn't sign was out, and it was all legally done by a lawyer. so I am a little confused about what's correct.

I would be very careful on this. If a seller negotiates with a tenant for early termination, in order to sell property-- the tenant can (at his/her will) agree to do so -- or disagree.. (mantaining his/her position in current lease). The lease runs with the property, and the tenant cannot be forced out. What you describe as a piece of paper could very well be determined by a court that it is a lease. You could be in violation of the Landlord-Tenant Act.

If there is a agreement for early termination,
through seller/Landlord negotiations, at tenant s' will, then that agreement should be in writing signed by both parties (existing tenant and existing Landlord.)

This message has been edited. Last edited by: real estate lady,

Any piece of paper, ridiculous or not, as long as it has signatures on it, it is considered legal and binding. It could be written down on a napkin or a legal document, it would still hold up in court. But if you are going to change the rules of the lease once it's over, you must give atleast thirty days notice before the lease expires. This will give tenant the chance to either accept your conditions or move out.

Also, make sure you get the security deposit that the tenant put down from the current landlord. Make sure you do a complete walk through with pictures from day one. This way, if something gets damaged, he can't say that you accepted this, or it was a pre-existing condition.

When our landlord sold our building, I still had a few more months left on my lease. I could have made life difficult for him and stayed the remainder of the lease, but he was so nice about it and offered us some money for a down payment for our house. He also granted us a few additional weeks at no cost so we could get through closing. We then started looking at a house that was currently being rented out. We opted out of it because the tenant made it clear he was not leaving without a sherriff.

You also need to make sure that you know the eviction laws in your state to a tee. In some states it's illegal to remove a tenants property without a court order. If you violate that law, in some states, monetary damages can be tripled. Can you tell I watch too much Judge Judy???????

Talk to a real estate attorney, many cities have local laws protecting renters.

The first house I made an offer on fell out of escrow after the tenants refused to leave. Both my realtor and the seller's realtor claimed the tenants were fine with leaving and buying the house was no problem. So 3 days before the close of escrow, I was shocked to find the tenants were putting up Christmas lights and showing no signs of moving. Long story short, tenants were ticked, had gotten some renters' rights attorney involved, and had no plans of leaving without a fight. The eviction process is long and expensive and does not protect a homeowner from having the house completely trashed, which these particular tenants were promising to do if forced to leave.

I believe people do have a right to evict tenants when a house changes hand. With the current foreclosure mess, there's a lot being in the news about renters getting kicked to the curb when a home is foreclosed, so obviously banks don't have to follow the current lease contract. But I would steer clear of any homes with renters. It's too messy.

i thank you all for your responses. it is very helpful. It's a hard situation, and I still have a way to go in the process. home inspection could prove to be a problem etc. the tenant was given notice yesterday, and she may very well leave which would be great. so- it's a wait and see. thanks again to all!!

quote:

Originally posted by Kaden:
I believe people do have a right to evict tenants when a house changes hand. With the current foreclosure mess, there's a lot being in the news about renters getting kicked to the curb when a home is foreclosed, so obviously banks don't have to follow the current lease contract. But I would steer clear of any homes with renters. It's too messy.

Foreclosure is a whole different animal. Foreclosure is a legal process that terminates a lot of rights and obligations that would run with the property in a normal sale situation, unless there are nondisturbance and attornment agreements in place...something it's very normal to get in commercial leasing, but not so much in private/individual landlord/tenant situations. You don't generally have "a right to evict" tenants when you acquire a property, but you do have the right not to renew a lease at its conclusion, or to give a 30-day notice of termination to a month-to-month tenant.

The owner of a house I sold sometime ago, had written her own lease, the house went under contract and the renter went to an attorney with the badly written lease. The owner had to pay $1,200 to the renter to get them to move out. The renter was a "friend" of the owners, who let them live there during a difficult time. So much for friendship and compassion.

that's my point. many of these leases are just illegal. and my lease doesn't even have in it who pays the utilities! those leases you buy at stationary stores etc have so many illegal, unenforcible clauses. why should I have to abide by that? I think I'll write a letter to my congressman or whoever. I agree I shouldn't be able to change the rent, but the lease should be up to me.

quote:

Originally posted by ames:
It essentially is a few paragraphs, no contingencies in the event the property sells, or rules etc etc. It's something somebody sat at a typewriter and said "gee, I think I'll put this in the lease". It truly is a meaningless piece of paper for the most part, which is why I have a problem assuming it.

Just because the current lease doesn't have all the contingencies and restrictions that you, as the new landlord, would want it to contain, does not make it a legally meaningless piece of paper.

quote:

Originally posted by ames:
those leases you buy at stationary stores etc have so many illegal, unenforcible clauses. why should I have to abide by that?

Just because a lease has a clause that the court will not enforce, does not relieve you of your obligation to abide by the other clauses.

If your lease doesn't state who has to pay the utilities, you can certainly ask a judge to determine who does pay the utiliites. However, that doesn't revoke the "no pets" clause.

no no, kind of missing the point. there are things like, "if the tenant doesn't pay the rent, they will vacate immediately. If they don't vacate with in 5 days, landlord will remove belongings from apartment and change locks". There also is a sentence that is somewhat big-o-ted- you have to understand the area, very backward and lilly colored. I don't want to have to go into a court of law with that lease.....

but I can't change it, I know that now. It's just frustrating, and doesn't seem fair to a buyer. I want to make the lease legal and fair, which I suppose some people would want to make it the opposite.

How about asking the remaining tenant to sign a new lease?

If the new lease contains no rent increase for, say, two years, they might jump at the chance. However, the new lease will give you a change to clean up the language and clauses.

Two years of no rent increases might be a small price for you to "pay", to get that new lease.