New Lease Contracts @closing????
Investor · Paducah, KY · Member since 2016 · 4 posts · 0 votes
I currently own a handful of rental properties with great tenants and the purchase/closing of them were uneventful. I am in the final stages of closing on a quad that is currently full. The previous landlord structured the rent/utilities in the lease so the tenant pays $750 a month for rent, water, electric and sewer/trash. I have decided I am not going to pay for utilities, I don't at any other properties and wont here either. The option I am going to give them is decreasing the rent to $650 with no utilities. My plan is to sit down and convey this politely and professionally to each. Inform them I value them as a tenant and don't wish that they leave, however there are going to be a few growing pains. So my question is, in the worst case scenario they don't sign a new lease and they wont leave, how can I file for eviction without a current lease? Or at that point is it criminal trespassing and can have them removed? How can they be removed if that's needed?
The existing leases with the tenants will have to be honored. You can ask them but not require require them to sign a new lease until the lease term expires. Once the lease term is up, you can sens them your lease and lease terms with 30 days advance notice. If they do not want to sign the lease at that point, you can give them a 30 day notice to terminate their occupancy
A tenant is never trespassing so that is never an option. Evictions are for non-payment of rent or other lease violations
On a different note, Paducah is a cool little town. My grandmother grew up there
The existing leases with the tenants will have to be honored. You can ask them but not require require them to sign a new lease until the lease term expires. Once the lease term is up, you can sens them your lease and lease terms with 30 days advance notice. If they do not want to sign the lease at that point, you can give them a 30 day notice to terminate their occupancy
A tenant is never trespassing so that is never an option. Evictions are for non-payment of rent or other lease violations
On a different note, Paducah is a cool little town. My grandmother grew up there
1. Give each tenant your new contact info and request they fill out a current tenant contact sheet with phone, email, car license, emergency contact for them on possession and post your information in entry of building.
2. Schedule a walk thru of each unit within the first 2 weeks of ownership and do a condition sheet as of that date. This is your basis for security damage from your ownership date till they leave.
3. Review lease with tenant at walk thru, their former lease stays in effect until end of that term but you can offer a new lease so if they accept fine.. if not your going to have to wait. At that point you can let them know utilities will going forward not be part of the lease paid by you so they know what to expect.
4 I hope the units are metered separately or your going to have a interesting time of dividing up utilities properly it can be done but it's difficult.
5. Give proper notice when time comes for renewal of new lease your offering and they can either tender notice to vacate or they will stay. I usually send renewal notice out an extra 15 days early prior to the 1st of the month.
6. If they fail to renew , send a notice to vacate and if they aren't gone then you will be forced to file eviction action for cause " failure to vacate".
I currently own a handful of rental properties with great tenants and the purchase/closing of them were uneventful. I am in the final stages of closing on a quad that is currently full. The previous landlord structured the rent/utilities in the lease so the tenant pays $750 a month for rent, water, electric and sewer/trash. I have decided I am not going to pay for utilities, I don't at any other properties and wont here either. The option I am going to give them is decreasing the rent to $650 with no utilities. My plan is to sit down and convey this politely and professionally to each. Inform them I value them as a tenant and don't wish that they leave, however there are going to be a few growing pains. So my question is, in the worst case scenario they don't sign a new lease and they wont leave, how can I file for eviction without a current lease? Or at that point is it criminal trespassing and can have them removed? How can they be removed if that's needed?
What is the current market as far as rent without utilities included? I'd go with that.
I would not sit down with them and try to be their friends. That has not worked in my experience. It's best to stay at arms length. Get too friendly, and they will expect favors.
Also, if they have a lease you'll have to honor it as-is, until it expires.
When they are about to expire, I'd simply send them proper notice (30 or 60 days, etc.) according to your laws, about the new terms.
My guess is that you don't have to lower the rent. If they have separate meters, I'd simply give them proper notice that they must put such and such utilities in their names by such and such date. Then if they fail to do so, give them proper notice to evict for failure to comply with rental agreement.
Anyway, my guess is that other rentals in the area don't include utilities. What I used to do, is pretend I was one of my tenants, and look at options on Craigslist, etc. Before I gave notices of rent increases, etc., I'd learn what they'd see when they started shopping for a different place. I'd price rents comparable to other places, so if my tenants were looking at options, they'd see that they were not going to get a better deal by moving.
But, I also didn't give them a deal so good that it cost the owner money. No need to be cheaper than the competition. Just comparable.
To everyone thank you for the responses and the insights, I truly appreciate it. I have a very good understanding of my state revised statutes, where to find them, how to interpret them and apply them. I was merely trying to have an outside the box response of my situation. Sue K. Awesome feedback, I appreciate it. It is a college town and currently the rent numbers I stated are below market so I got decent wiggle room to restructure how I want. The majority of rents are paid my mom and dad and I have tenant turnover and re-let in less than 48 hours with a quick clean and repair. So the demand is pretty good. Just wanted some veterans opinions!!
With students, you could get a higher rent if you just give them a month to month contract, and don't require a year lease. Depending on the type of student, they may not want to be paying for summers. Just a thought.
I only did M2M agreements, but I let my students sublease over the summer. Also, I found that if I had vacancies in summer, I could charge a premium for summer internship students. It's really hard for summer interns to find short term housing. So, I learned that the fear some landlords have of ending up with vacancies over summer, with student tenants, is actually not a problem. As long as you're cheaper than the Extended Stay hotels, you won't have a problem with finding short term renters for the summer.