Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
I'm sure there's a law that can be easily referenced in the CA Civil code or some other legislation that tells me why I can't do that... but basically the question is this:
If I buy a property, distressed or otherwise, and it has a tenant in it that can provide a valid lease at market rate, I am under the impression that I have to honor that lease regardless of its terms or duration. Is this a correct understanding, and if so why? If not, why not?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
14y
If you buy a property that has an existing lease, you have to honor it regardless of the terms. You may want to use an estopple letter to reiterate the key terms. That's just a letter summarizing the terms that's signed by the tenant. Avoids problems like "oh yeah, the lease says the rent is $1000 but the owner told me I only have to pay $500."
West, MI · Member since 2012 · 674 posts · 182 votes
14y
I have this same issue right now, tenant is under lease, owner sold to me. I consulted with a attorney prior. The lease survives the sale. I had the previous owner have the tenant sign a addendum that I created. Allows for a 30 day notice upon sale from the new owner. I am in the process of using the addendum now.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
State law governs I believe as there is nothing federal except under the recent foreclosure act (sorry can't recal the title). That applies to lenders foreclosing on a property with a valid lease and it requires the lease be honered to its expiration or 6 months, which ever is shorter. They may attack the validity of the lease and those issues are stated.
HUD regulations apply to lease terminations when housing is subsidized.
A lease survives a purchase, except when a buyer purchases a property as an owner occupied home and 30 days may be given or a lease may be brokern with 30 days when an onwer has for any reason lost their primary home and has to take the property for their residence.....all state by state determinations, but you may have such exceptions.
There are also other covenants in a lease other than just paying rents and if there are other significant covenants broken a lease may be terminated. Depends on circumstances, allowing trash to accumulate, tearing asunder or failure to maintain is an issue where notices to cure the default in keeping with the terms must be given and after several occuarnces the owner could have grounds to terminate.
Another issue is drug usage, sale or manufacturing are sufficient grounds for an automatic termination, in fact here, it's an immediate set out but the landlord will need to prove it.
You do have the right to enter for repairs, treading lightly on the tenants right to quiet enjoyment, but things can be miserable to the point of a tenant wanting to break a lease too.
The story of an Executive Director of a housing authority property is true, where he removed the front door to make repairs to it and the tenant left. Such tactics can get you in trouble.