Removing Tenants Upon Purchase Of New Duplex

[Kristopher Sharpe]

Hello BP,

I am currently under contract to purchase a duplex in Colorado and had a question regarding the tenants that currently are in place. I am going to get an owner occupied loan and wanted to know your opinion should this scenario play out.

Currently the tenants have been in place for 5 years and have been on month to month basis with the current owner. The current owner has also not increased their rent since their initial lease. Currently they are well below market rent and I would 1) need to kick at least one of them out so I can get my owner occupied loan, and 2) need to increase their rent to market rent since they are substantially below.

Worst case scenario the tenants do not vacate at which point I cannot get the owner occupied loan. Theoretically, if they refuse to vacate would this be considered trespassing when they are on the property at the end of their notice to vacate? Or would this just fall under needing to evict them at that point?

I am completely working in hypotheticals here, they may just leave without issue, but just trying to go through possible scenarios. 
 

Any input would be greatly appreciated. 

[Steven Foster Wilson]

Originally posted by @Kristopher Sharpe:

Hello BP,

I am currently under contract to purchase a duplex in Colorado and had a question regarding the tenants that currently are in place. I am going to get an owner occupied loan and wanted to know your opinion should this scenario play out.

Currently the tenants have been in place for 5 years and have been on month to month basis with the current owner. The current owner has also not increased their rent since their initial lease. Currently they are well below market rent and I would 1) need to kick at least one of them out so I can get my owner occupied loan, and 2) need to increase their rent to market rent since they are substantially below.

Worst case scenario the tenants do not vacate at which point I cannot get the owner occupied loan. Theoretically, if they refuse to vacate would this be considered trespassing when they are on the property at the end of their notice to vacate? Or would this just fall under needing to evict them at that point?

I am completely working in hypotheticals here, they may just leave without issue, but just trying to go through possible scenarios. 
 

Any input would be greatly appreciated. 

Once you close on an owner occupied loan you have "60 days to move in" so plenty of time to serve the tenants a notice of non-renewal. If your tenants refuse to move out, then they are trespassing and will need to be evicted. 

Most people are reasonable though and will be sad but will move on. Make sure you do this in a legal way though. There are a ton of laws regarding tenant laws.