prospective rental property: owner has no lease agreement??

[Nathan Williams]

I'm considering putting an offer to a condo in Indianapolis as an out of state buy and holder... everything was looking VERY good until I learn the owner has no lease agreement with the tenants currently living there which appears to be some kind of roommate situation.  My immediate thoughts are how on earth could I even enforce the rent paid and the potential nightmare it might be if they refuse to move out.  

Im thinking I should insist on the owner getting a transferable contract signed by all parties before closing otherwise I walk away.  Any thoughts on this? thanks