Buying a property that is currently occupied by a tenant can be tricky because you have to balance your needs with the tenant's, as well as with state laws regarding this type of transfer. On paper the situation seems simple; you buy, tenant leaves, you move in. But the current rental market, state laws, and tenant disobedience can all make that simple procedure into a much more complicated situation. If you have your eye on a tenant-occupied property, you should be careful about how you approach dealing with the tenant, and consulting a real-estate attorney is essential.
Adequate Time to Leave
The tenant will need adequate time to find another rental and to pack up. State law often sets minimum notice times, so you are required to give the tenant at least that much time. It would be nicer if you could give him or her a little longer, too, especially if you're in a region where rental housing is difficult to qualify for or even find to begin with. Whichever length of time you go with, work the exact amount of time and the day the tenant is to move out by into the sales agreement, and notify the tenant immediately.
Deposit Transfer
If you are instead allowing the tenant to stay past your purchase date, even if the tenant is supposed to leave shortly afterward, ensure that the tenant's deposit transfers from the previous owner to you. When that tenant leaves, he or she is legally due the deposit or the remainder of the deposit after deductions for cleaning and repairs. If you do not have the deposit transferred to you, you'll have to pay the tenant out of your own pocket. And you can't just refuse to pay or tell the tenant to contact the old owner. Ensure the deposit transfer is included in your purchase contract.
Refusal to Vacate
One more issue is if the tenant flat-out refuses to move. Maybe the tenant has a child in school or simply doesn't want to go, thinking that state tenant laws will protect him or her. A real-estate attorney can help you navigate state eviction processes to ensure that the tenant either leaves as agreed or is evicted -- while it's up to you if you want to give the tenant more time, there does come a point when you need to be able to move in. Keep in mind that angry tenants sometimes deliberately damage dwellings, and a real-estate attorney can help you recoup costs if necessary.
The good news is that most tenants will leave as agreed, or they'll at least contact you to discuss what to do if they have been unable to find housing in time. Chances are you'll meet up with good intentions, but it always helps to have a real estate attorney, like Steve Butcher Sr, on your side.
Share3 December 2017
Although I am far from perfect, I have focused on abiding by the local laws for the vast majority of my life. Unfortunately, about five years ago, I realized that I was being accused of a crime that I didn't commit. I thought about letting the trial run its course, but then I realized that fighting would be important to ensure my future. I teamed up with a great lawyer, and things became much easier overnight. My legal counsel told me what to do and what to avoid, and he was able to prove the facts in a court of law. This blog is all about choosing to fight charges.