inherit tenant in rental control area

[Joe Xie]

I am buying a rental property at Bay Area has a tenant who is paying 20%-25% below the market. Due to the rental control law, I am planing continue with the term's the selling landlord. This is my first time to get a property with tenant, need some help on What are the steps I need to take to make the transition smoothly? What pit holes should I watch out?

[Account Closed]

Joe,

You'll have to honor the existing lease. I suggest you get an estoppel for each unit so there's no arguments later on. Talk to each tenant, if possible, to learn what is wrong with the building. Do they have any complaints? 

Is this property in San Jose? 3 units or more, which were built before September 7, 1979, are subject to rent control. Duplexes or less are exempt. 

20-25% below market is not bad. Hope you got a decent price for it. Given rents have plateaued in the last couple of years, You can catch up with the rent in the next few years with the allowable annual 5% rent increase. If you want to speed up the annual rent increase to 8%, study up on the capital improvement pass through. 

The CSJ recently passed Just Caused Eviction. I suggest you read up on their 12 Just Cause Evictions to familiarize yourself

Best of luck.