Purchasing a Rental Property with Tenants in place.

[Marco Lopez]

I'll be closing this Tuesday on a property in Chicago in Hermosa neighborhood. It consists of a coach house in the back with 2 units and a store front. All 3 are currently occupied, the 2 residential units are currently on month to month leases. I understand that I'll be taking over the leases what paperwork should I ask the current owner for at the closing? Also does the current owner have to transfer the security deposits to me? If so where am I suppose to place those funds legally? Thank you very much. Any advice would be appreciated. (1st time posting here too so sorry if I did something wrong)

[Paul De Luca]

Congrats on your purchase! 

Before closing your attorney should have already obtained all of the relevant documents requested in your Attorney/Inspection period, such as leases, rent roll, invoices, service tickets, roof warranty info, collection statements to confirm all rent payments are up to date, copies of 12 months trailing water/sewage, gas, insurance, garbage and electric bills paid by Seller, assignment of all leases and transfer any security deposits to you. It's also important that the seller verify the zoning of the property, especially since you have a storefront and coach house.

If you had the seller complete repairs, you should receive invoices or receipts for repairs that were completed. Make sure to verify during your final walkthrough.

Talk to your attorney about the specific requirements in the handling of security deposits, as Chicago has very strict laws regarding security deposits.