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Updated about 7 years ago on . Most recent reply
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Addendum for keeping the same lease but changing the unit
Hi BP Forums,
I have an interesting scenario for my first property that I hope someone has experience with. Ultimately I am looking for an addendum that states something to the effect of: "The Tenant has agreed to change units within the building but keep their current lease."
The Background:
To make a long story short. I am closing on my first tri-plex on March 1st. I used FHA funding to house hack and requested that I would occupy one of the units which the seller agreed to and gave the current tenant (who was on a month-to-month) notice to vacate. During the mortgage formalities and while the property was under contract one of the other tenants gave notice that they would vacate. There is a month gap between when I am closing and when the second tenant is vacating. The seller would like to keep 2 of the units occupied until close and proposed to give the tenant who he originally gave notice to the opportunity to occupy the unit that is being vacated by the second tenant. The tenant that was given the proposal said they would do that but they would only stay for one month (turns out they are buying a property and settling March 1st). Its also worth noting that both units are $200-$300 under market value so having two tenants exit isn't a bad thing. Also, no one is explicitly trying to pull one over. The seller happens to be family friends with my family so I know he is trust worthy (he's also done a ton to the property in good faith). Secondly, the tenant who was given the proposal is a good tenant. Has paid on time and never been late once in three years. They also take good care of the unit.
My Solution:
I think I can work with the request of the tenant and seller, but to cover my behind I think I should ask for an addendum to the tenants current lease to state something to the effect of: "your current lease holds true but your unit will change. If you choose to stay past March 1st an new lease will need to created and signed".
BP experts - See any other ways I can skin this that won't tank the sale?
Best,
MB