Buying a property where tenant does not have a lease

[Srini Murthy]

What are your thoughts on a tenant who lives in the property(long term) but does not have an active lease. She does pay rent based on listing agent? Will an estoppel work here?

[Eric Knutson]

The estoppel agreement will verify what they pay and the terms they agreed to but I don't think it will hold up in case of an eviction. It is more of a verification for the rent being paid. I don't think it will provide any safeguards for damage or liability etc. 

 You can always request that the tenant sign a month to month agreement before purchase and then you can decide what to do with them after you own but it would give you some protections. 

[Srini Murthy]

Thanks Eric!  This is what I found below on an attorney's website

"The contents of an estoppel agreement are conclusively presumed to be true and bind both the landlord and tenant. Plaza Freeway Ltd. P’ship v. First Mountain Bank, 81 Cal. App. 4th 616, 628 (2000). In fact, the contents of the estoppel agreement are deemed conclusive even if they are erroneous. Id. What this means is that tenants are bound by the contents of an estoppel certificate. Id.; Cal. Evid. Code § 622. Landlords are also estopped from challenging the veracity of the estoppel certificate. Miner v. Tustin Ave. Inv'rs, LLC, 116 Cal. App. 4th 264, 271 (2004); Cal. Evid. Code § 622. Where an ambiguity exists between the estoppel certificate and the lease or other written document, courts will read the lease and estoppel together to rectify the ambiguity. Miner, 116 Cal. App. 4th at 268; Cal. Evid. Code § 622. Although these leading California cases pertained to commercial tenants, the court's opinions are relevant to residential tenants as well.
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[Eric Knutson]

@Srini Murthy hopefully it is a non-issue if you pursue this property! Good luck