Inheriting tenants without security deposits

[Nipa S.]

Hi all, I’m a brand new BP pro and am excited to be closing on a triplex in a few days. I am in DD and will be inheriting tenants for the first time. I found out that the seller did not require the tenants to pay a security deposit despite having a lease in place. As I always have required this for my tenants is it ok to add this requirement to the tenants’ existing lease agreement that will be transferred to me? Would appreciate any advice on approaching this issue. Thanks in advance.

[Mike McCarthy]

Make sure the tenants agree that there's no security deposit.  An estoppel letter is a good way to do this - basically just a signed letter from each tenant stating what the rent is, whether it's month-to-month or with an end date, and if there's a security deposit.

You'll need to wait until the leases expire to make the tenants sign new leases.  You could ask them nicely to update their leases, but they don't need to if the lease is mid-stream.