Closing on a Duplex - NO LEASE IN PLACE

[Brandon Reiter]

I am closing on a duplex after the first of the year and have a few questions for the BP community. Each unit rents for $275/mo, but fair market seems to be more like $600/mo. There are currently NO leases in place with the current property owner.

First of all, is a minimum of 30 days notice required for giving tenants notice of increased rent or notice to vacate? Or should the current property owner be giving notice to the tenants already? It seems that the owner has no real incentive to tell the tenants to move out. Don't get me wrong, I would probably do the same thing if I were in his/her shoes.

Secondly, what if I was planning on occupying one side of the duplex? This isn't the case, but it seems that many buyers would do this and expect to occupy their property on day #1. What do you think?

[Jon Holdman]

You need to find out Montana law for the default lease terms. 30 days notice is probably right, but I don't know Montana law. Having a lawyer you already know is a good idea for any landlord. Now's the time for you to find one, spend $200 and have a discussion.

Do "estoppel letters" with the tenants. These reiterate the key lease terms: Term (month to month, sounds like), who's on the lease, rent, deadline for notice, who pays utilities, security deposit, etc. Look through the lease you're going to start using and pick out the key items. Get the teanants and existing landlord to sign these letters. That avoids misunderstandings later over the terms of the lease.

Be sure you get credit for any partial months rents and security deposits on the settlement statement. Otherwise you'll be out of pocket for security deposits.

If you want these tenants out, you will need to give proper notice, whatever that is.