Inheriting Tenants Process

[Jacob Palmer]

Hey everyone! An aspiring rookie investor considering a house hack as my entry into real estate. How does inheriting tenants work? Say I buy an occupied duplex, do I have to honor their current lease? Do I draft a new one and have them sign it?

Thanks!

[Jerrod Rosen]

Hi Jacob, yeah legally you are required to honor the current lease they have in place. You can often talk to them before you take over the property to see if they would like to extend or vacate upon a change of ownership. If you have any other questions, feel free to reach out! 

[Andrew B.]

The prior owner's agreements with the tenants are as legally binding as it would have been with your signature on it. This is why it is important to get an estoppel certificate signed by tenant and seller prior to taking on a inherited tenant. The estoppel certificate outlines any agreements between tenant and landlord. This protects you if the tenant tries to tell you that he prepaid rent for the next 6 months or he had a huge deposit on file.

[Wale Lawal]

@Jacob Palmer

Taking over tenants in a duplex means you must honor lease agreements, transfer security deposits, and provide proper notice. After leases expire, landlords can draft new leases, re-negotiate terms, adjust rent, and implement policies. Thorough due diligence, professional communication, and familiarity with local laws are essential for smooth management and positive tenant relationships.

Good luck!

[Benjamin Aaker]

I agree with all the other posts. I would add that in your purchase and sale agreement, have your agent add a clause that allows you to review the leases and the agreement is contingent on your satisfaction with the leases. Usually they will end within the next year. It'll give you an out. If in doubt, have an attorney review.

[Nathan Gesner]

Quote from @Jacob Palmer:

Existing contracts transfer with the sale. You can attempt to negotiate with the tenants to see if they will agree to new terms, but it's unlikely. Be sure to get any changes in writing, signed by all parties.