Buying MFH - Seller doesn't have tenant lease info - Tips needed

[Faraz Ash]

Hello,

Buying my first multifamily property and a property with existing tenants. I've put an offer on a 3 unit MultiFamily property with good potential. The units are fully rented with 2 tenants who have been there for more than 10 years and another who is month to month. As part of our offer, we had asked that before closing the seller provide tenant information. The seller informed us that they do not have a formal lease with the tenants or security deposits. 

In this scenario, what are some tips to keep in mind and things I should expect from the seller before closing on a property with existing tenants?

Do I send the tenants a notice to vacate after closing or once under contract? If they want to continue staying when do I get them to sign the new lease? What steps do I take for a smooth transition?

Thank you for your help.

[Daria B.]

Originally posted by @Faraz Ash:

Hello,

Buying my first multifamily property and a property with existing tenants. I've put an offer on a 3 unit MultiFamily property with good potential. The units are fully rented with 2 tenants who have been there for more than 10 years and another who is month to month. As part of our offer, we had asked that before closing the seller provide tenant information. The seller informed us that they do not have a formal lease with the tenants or security deposits. 

In this scenario, what are some tips to keep in mind and things I should expect from the seller before closing on a property with existing tenants?

Do I send the tenants a notice to vacate after closing or once under contract? If they want to continue staying when do I get them to sign the new lease? What steps do I take for a smooth transition?

Thank you for your help.

 The term is Estoppel....

I got this from another post that has a brief description.

"Your offer should have the Contingency of Assignment of Rents and Deposits. The Estoppel will allow the exiting tenants to declare their personal property, current rent and the deposit on hold with the seller."