Urgent | Closed on First Property | Transition and 60 Day Notice Advice

[Zac Gorski]

Hey All! 👋  
So excited to announce that I have just closed on my first Property, a Triplex in Pittsburgh, Pa.  

For financial, insurance and logistical reasons, I will need to occupy one of the two units that are currently occupied.  
The lease states that I may give 60 Days notice to vacate to the Tenant who currently occupies this unit. 

Can someone provide insight, a template and help with how to best send this notice?  
Does it have to be notarized or certified?  

Closed August 12th - I am also confused about what happens with the rent money that would have been paid for August.  And what happens to the security deposits?  Do they just transfer somehow? 

Appreciate the help, 

[Jonathan Greene]

You should have sent a notice to quit on August 13th, but what are their lease statuses? If they aren't month-to-month, you aren't getting them out, and even if they are, you will likely have to line their pockets with cash for keys to get them out.

Who is in the third unit? It's vacant? Even if it's the biggest unit, you need to move into that one to satisfy the mortgage if it's liveable and then figure out how to get the tenants out.

Who was your agent on this because they have not prepared you for anything? The security deposits should have been transferred over and confirmed at time of closing.

[Zac Gorski]

Hi Jonathan, thank you for your reply! 

there is a clause in the lease that if there is a sale of the property that I can give 60 days notice to vacate essentially terminating the lease. 

There is one unit that is vacant but I am rehabbing that unit.  Per insurance I will be occupying the unit that this tenant is currently in.  It saves me money on the homeowners as it is a multi unit building. 

With regard to the deposits, I probably just missed that with all that was going on that day.  

Does the notice have to be notarized or certified or can I simply email a DocuSign or sorts? 

[Zac Gorski]

The current lease goes through to May 2025.  So keeping it is not an option. 

[Alecia Loveless]

@Zac Gorski of the lease goes through May 2025 there’s nothing you can do unless offer cash for keys which they may not accept. Your agent should have told you this.

Also the security deposits should have transferred separately but the rents for the last part of the month may have just been included in the sellers statement and come off the money you had to bring to closing.

Unfortunately if the security deposits did not transfer you will still be responsible for them out of pocket.

[Lynn McGeein]

@Zac Gorski review your closing documents carefully 1) if owner occupied mortgage, it usually requires you occupy x days from closing date (ours was 60) so maybe ask insurance and mortgage for extension if needed. 2) does your state have some rule where you can end a lease early to move in? If not, you likely must honor current lease terms unless tenant agreeable - read lease as it may have early termination agreement. 3) your contract and/or settlement statement should show security deposit transfer agreement. If you didn’t ask for it in the offer and not transferred at settlement, seller may not have to provide it, but you’d still be responsible for it when lease ends. Your agent should have reviewed all this with you during inspection or due diligence period. I’d just plan to occupy the vacant unit if you need to honor the current leases so you can meet owner occupant requirement for mortgage and insurance, unless the tenant agrees to go early.

[Theresa Harris]

the rent and deposits should have been transferred to you at closing.  For Aug rent, it would have been prorated.

How extensive are the renos to the vacant unit?  If they aren't that extensive, move into that unit.

[Zac Gorski]

Quote from @Theresa Harris:

the rent and deposits should have been transferred to you at closing.  For Aug rent, it would have been prorated.

How extensive are the renos to the vacant unit?  If they aren't that extensive, move into that unit.

 Hi all!  Wanted to provide some updates here. I really appreciate the input.  

All clear on deposits that they were credited in the loan. 

There is a clear as day sale clause in the original lease signed by the 1 bedroom unit that the tenant is living in in question.  This tenant is under the impression that since the paper he signed when he signed his renewal didn't clearly state the sale clause that it doesn't apply.   I don't see any way that this would be the case as there are no amendments or term changes at all from the initial lease to the renewed one.  I plan to serve him a 60 day vacate notice on Monday.  

the other until is a two to three bedroom which I don't need for just me.  I will be loosing money by occuring that unit.  

if the tenant still refuses to vacate , what can I do to protect myself of the for an eviction?  

Would an attorney be necessary or break the bank here making it a waste of money? 

[Zac Gorski]

Quote from @Lynn McGeein:

@Zac Gorski review your closing documents carefully 1) if owner occupied mortgage, it usually requires you occupy x days from closing date (ours was 60) so maybe ask insurance and mortgage for extension if needed. 2) does your state have some rule where you can end a lease early to move in? If not, you likely must honor current lease terms unless tenant agreeable - read lease as it may have early termination agreement. 3) your contract and/or settlement statement should show security deposit transfer agreement. If you didn’t ask for it in the offer and not transferred at settlement, seller may not have to provide it, but you’d still be responsible for it when lease ends. Your agent should have reviewed all this with you during inspection or due diligence period. I’d just plan to occupy the vacant unit if you need to honor the current leases so you can meet owner occupant requirement for mortgage and insurance, unless the tenant agrees to go early.

 Thanks Lynn!  

let me know your thoughts with the above reply and updates. 

[Theresa Harris]

Quote from @Zac Gorski:

Quote from @Theresa Harris:

the rent and deposits should have been transferred to you at closing.  For Aug rent, it would have been prorated.

How extensive are the renos to the vacant unit?  If they aren't that extensive, move into that unit.

 ...There is a clear as day sale clause in the original lease signed by the 1 bedroom unit that the tenant is living in in question.  This tenant is under the impression that since the paper he signed when he signed his renewal didn't clearly state the sale clause that it doesn't apply.   I don't see any way that this would be the case as there are no amendments or term changes at all from the initial lease to the renewed one.  I plan to serve him a 60 day vacate notice on Monday.  

...

if the tenant still refuses to vacate , what can I do to protect myself of the for an eviction?  

Would an attorney be necessary or break the bank here making it a waste of money? 

What did the lease renewal say? If it said the original terms of the lease still applied, then that covers it.  However, if they had them sign a completely new lease that did not refer to the terms of the original lease, then you may have a problem.  hopefully someone local has more advice.  

[Lynn McGeein]

@Zac Gorski hopefully the renewal clearly states that all other terms and conditions remain. Tenant could possibly argue since owner renewed through a specific date, no more early termination. It may depend on what a court thinks, if tenant takes it that far and how tenant friendly court is. In my area, decently priced rentals are still hard to find so hard to get rid of existing tenants, especially ones that can’t afford higher rents. I had a seller actually pay tenant’s security deposit to new landlord up front and then paid for movers to get the tenant out before closing. In the future, if you need a unit vacant, make sure it is vacant by closing.

[Jonathan Greene]

Is the clause in the original lease assignable on sale? You aren't thinking this through, as a lot of new investors do. Ok, you have a clause and as a new owner you are going to immediately serve notice of eviction - how do you think that is going to go over on a person-to-person basis? They could put cement in the toilet, rocks down it, they could refuse to leave and leave you tied up for six months trying to get them out or more. You definitely need an attorney and your realtor crapped the bed or you weren't listening at all since you didn't even know where the security deposits went to. It sounds like you were flying blind and still are. I agree with @Theresa Harris, if they signed a new lease without the clause you are done until 2025 and your loan will get called.

[Theresa Harris]

Quote from @Jonathan Greene:

Is the clause in the original lease assignable on sale? You aren't thinking this through, as a lot of new investors do. Ok, you have a clause and as a new owner you are going to immediately serve notice of eviction - how do you think that is going to go over on a person-to-person basis? They could put cement in the toilet, rocks down it, they could refuse to leave and leave you tied up for six months trying to get them out or more. You definitely need an attorney and your realtor crapped the bed or you weren't listening at all since you didn't even know where the security deposits went to. It sounds like you were flying blind and still are. I agree with @Theresa Harris, if they signed a new lease without the clause you are done until 2025 and your loan will get called.

 If the unit they are renovating is vacant, they should be fine moving into that unit and using it as their primary residence...not what they wanted to do, but c'est la vie.