Acquiring property with tenants in place

[Sheena Lee]

I am about to acquire a triplex that is fully rented until next year. I’m taking over the leases and need some advice on next steps. After closing, I’m thinking of scheduling to meet each tenant and go over their lease, their experience, and my expectations. Am I able to institute new policies such as no smoking indoors, snow removal, restrictions on pets? Or would this have to wait until the lease expires? Must we continue the leases as is, or do we create new leases, since the original ones were signed by the previous owner? Any other advice? This is my first time acquiring a property with tenants in place. Thanks in advance!

[Andrew B.]

You've waited far too long to learn your local laws. You need to download a copy of your local landlord tenant laws and familiarize yourself with them before you end up in a situation, not after.

If you did download your local laws you will most likely find that the lease transfers to you upon purchase. The lease is as legally binding to you, as it would be if your signature was on it. You cannot make any modifications without the tenant agreeing to it.

My advice, beyond learning your local laws, is to make sure you are getting security deposits and pro-rated rent at close. Close as early in the month as possible, so your pro-rated amount is as high as possible. This also gives you more time to introduce yourself and give tenants time to figure out where to send rent. Finally, get estoppel letters signed by tenants and current owner so the tenant cant give you some unknown story about how they pre-paid rent for the whole lease and its not their fault the old owner didn't give you the money.