Inherited Tenants - How to Introduce Yourself
Member since 2022 · 5 posts · 2 votes
Inherited Tenants - How to Introduce Yourself
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Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
3yAloha,
Ideally you instruct the current LL/PM to send/post notification of change and introduction with your basic contact info and anticipated effective date. You follow up immediately after closing with additional letter and further info such as where rent is to be sent, and how to request maintenance. You also should request the tenants to contact you within 7 days to schedule a brief walk through inspection and meeting with them. (If they "test" you by failing to contact you, post a notice that you will be inspecting at Date/Time as allowable by local law) At that meeting, and after you have inspected their unit; and asked if there are any uncompleted or unreported repairs; and confirmed with them the current rent, term, security deposit (which should be transferred to you at closing), ownership of appliances, parking location, who is doing yard service, who is paying which utilities, and anything else that may be applicable, THEN you inform them you will be terminating their current agreement with X days notice per local law. If they wish to remain, they will need to complete and return YOUR rental application with proper supporting documentation for income, savings, or trust fund. If approved, they will be able to sign YOUR new Rental Agreement under your terms.
6 Replies
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3y
Aloha,
Ideally you instruct the current LL/PM to send/post notification of change and introduction with your basic contact info and anticipated effective date. You follow up immediately after closing with additional letter and further info such as where rent is to be sent, and how to request maintenance. You also should request the tenants to contact you within 7 days to schedule a brief walk through inspection and meeting with them. (If they "test" you by failing to contact you, post a notice that you will be inspecting at Date/Time as allowable by local law) At that meeting, and after you have inspected their unit; and asked if there are any uncompleted or unreported repairs; and confirmed with them the current rent, term, security deposit (which should be transferred to you at closing), ownership of appliances, parking location, who is doing yard service, who is paying which utilities, and anything else that may be applicable, THEN you inform them you will be terminating their current agreement with X days notice per local law. If they wish to remain, they will need to complete and return YOUR rental application with proper supporting documentation for income, savings, or trust fund. If approved, they will be able to sign YOUR new Rental Agreement under your terms.
- 3yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
You should get their deposit and prorated rent from the seller. Have the seller give the tenants your name and then you contact them and give them your contact info, and let them know how to pay the rent. Do an inspection of the property as you won't know what it was like when they moved in, only the condition from when you bought it.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Introduce yourself, and put them on a long term lease or find new tenants.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Ivan Cortez:
I recommend an in-person introduction with a letter, preferably on the day of closing. I would hope the Seller already told them something about you!
My introduction letter is brief. It introduces me as the new owner and includes payment instructions, how to contact me for questions or ordinary maintenance issues, and how to contact me if there is an emergency. I briefly describe what constitutes an emergency. Lastly, I tell them that I need to conduct an inspection within one week and ask them to contact me for that.
I hand-deliver it so I can hopefully meet them in person and schedule the formal inspection while talking to them. I reserve the inspection period for questions so that my initial meeting is very brief. During the inspection, I will take pictures to document condition, ask them if they have any questions or maintenance concerns, and then explain the way forward. If you are putting them on a month-to-month lease, this is the time to have that conversation.
The DIY Landlord Book4.7248 Reviews - Investor · Chicago · Member since 2022 · 128 posts · 85 votes3y
Dunno, my property manager deals with my tenants. Never met my tenants. Glad for it too.
- 3yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
If there is no information passed along on the current tenants in a newly purchased property, the landlord needs to start gathering some. Without essential information, you could easily end up in a situation without a clear lease arrangement and unsure how to handle your inherited tenants.
You need to have a clear set of tenant–landlord guidelines for both you and the tenant to see, and that can only be formalized through a lease agreement or other written contract. Without this type of contract, you and your tenant may not be able to see eye-to-eye on specific issues.
Getting this information in line as soon as possible is an essential part of the transition process when buying an occupied property.
Step 1: Start Before You Buy
Before you purchase an occupied property or even make an offer on one, it is best to ask for information about the existing leases and any additional arrangements between the landlord and the tenant. Purchasing a property sets you up to take over the lease as-is, which means that you need to be familiar with exactly what you will be signing up for.
Many things could be tricky if you aren’t paying attention and reviewing actual documentation. Some sellers, for example, will say that a property could make up to $1,000 a month, but it is currently being rented for only $750. If you don’t review the lease agreement, you might mistakenly assume the current rent was higher.
Purchasing a property without any information about the tenants or the lease agreement means you could be walking into a situation that is a losing battle. No landlord should do this if it is avoidable. If, for some reason, you need to purchase an investment property quickly and are not able to slow down to do this research, make sure you are prepared for the entailed risk.
Beyond just reviewing the documentation yourself, it is also essential that you look into getting an estoppel agreement to ensure things are as the seller presents them.
Step 2: Get An Estoppel Agreement
Gathering Info On Inherited Tenants
Though most people want to assume the best in others, it is possible that the seller and current landlord of an occupied property could lie about what is in the lease. The documents they give you may say one thing while the tenant has said something else.
One way that you can verify what is actually in the lease is to do an estoppel agreement before purchasing a property. This agreement gives current tenants a chance to disclose the terms of their lease as they know it so that you have a chance to find discrepancies before committing to a purchase.
Any discrepancies that arise should be sorted out before closing. Differences can be as simple as honest confusion, or they might be something more complex like a fake or forged lease. Regardless, you want to have things straight before you are tied to the property.
Most sellers will have no problem with this type of agreement being part of your offer terms or even something discussed before you put in an offer. If a seller shows a lot of hesitation to enter into this type of agreement, there is a good chance there is something they are trying to hide.
When requesting an estoppel agreement, ensure that it contains the following information:
All tenant and occupant names
Lease terms, including start and end date
Rent amount and due date
Security deposit amount
Utility arrangement (who pays, etc.)
Appliances (who owns them, etc.)
Pet addendum information, if applicable
Current maintenance list, if applicable
Any other addendums
Both you and the inherited tenants should sign this document. Keep it on file for reference later on. This document shows certain terms. If a tenant later tries to claim something different, you can bring up this agreement to clarify any confusion and prevent big fights.
Step 3: Check Your Purchase Contract
Once you move forward with purchasing a property, your sale agreement will include a purchase contract. This contract should detail information about the lease agreement, the tenant, and other basic information. In an ideal situation, it will also include the estoppel agreement and copies of all documentation the landlord has on the tenants that they are permitted to share.
Additionally, the contract should detail how the security deposit will be transferred and exactly when the lease agreement will transfer to you as the landlord. Looking through all of this information carefully will ensure you have all of the information needed to take over as a well-informed landlord.
Step 4: Communicate With The Tenants Frequently
Another way to get more detailed information about how the rental unit is being managed is to talk directly with the tenants. One way to do this is to deliver a change of management notice to the tenant. This document informs the inherited tenant about new contact info, where to pay the rent, and how to report maintenance issues.
If you did an estoppel agreement, the tenant might already be aware of who you are and what you are like. Still, it is often a great idea to do more than just pass paperwork back and forth.
Many landlords make a personal visit to meet the tenant. You can take the opportunity to get more detailed paperwork filled out then if you need it, such as setting the tenant up on your property management portal.
Additionally, asking follow-up questions about total occupants, pets, and more can help landlords compare the current household to what is on the lease agreement if you did not have an estoppel agreement.All the best!
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