When to start communication with inherited tenant

Question

Do I have to wait until the property closes to begin communication with my new (to me) tenant?

I'm inheriting a tenant on a property and would like to send a welcome letter explaining things, but I'm not sure if this is allowed before I legally own the place or not.

Matt Ziegler · Answer

Matt,

How would you want to be communicated to if you were the resident? Open Honest respectful discussions are a good place to start. We bought a duplex late last year, with residents in both units. They were asking us during the first walk through..."are you the new owners, are you raising the rent"...

Once we closed, we walked through with our contractor and they started to realize how much work  there was to do, they got the idea of the changes that we planned.

We wanted them to stay for the terms of the leases and told them as much. Once the leases are up(one in March and one in April) we explained that we planned to do extensive remodeling. They would have to vacate, and if they wanted to apply once we were done, that would be fine. They asked about the new rates and when we explained out rental criteria, they self selected to move on.

This , so far has worked out well.

Hope that helps...

Ravi P. · Answer

@Matt Slease

Your first contact should be prior to closing.

Have your attorney send an estoppel letter to the current tenants. That way you can confirm the terms of their lease( occupancy, term date, deposit, pets, etc.). In addition you can ask about any outstanding repairs the Seller may try to avoid. Or any verbal promises.

Chris Davidson · Answer

@Matt Slease how far are you away from closing? I think a good time for it is the final walk-through before closing or right after closing. I am not positive on the legality of it, but don't see any issue with a friendly conversation in a pre-close walkthrough plus will let you know any deferred maintenance items the tenant has been requesting be fixed.

Jim K. · Answer

@Matt Slease

I second @Ravi P.'s recommendation. I should preface this by saying that I am a local investor in an urban area, most C-class.

If this is a single family up to a quadplex, I'd have talked to the tenants before closing and informed them of the coming change in ownership. I'd have handled the estoppel issue personally, face-to-face. Estoppel letters/agreements/writs/certificates are just fancy legal terms for something simple -- getting confirmation from the existing tenants about the amount of the rent per month, back rent owed, security deposits owed, any other bill amounts owed, what works in their residence, what's busted in their residence, what was promised to be fixed in their residence and never was. You simply can't take your seller's word for those things, ever.

There is nothing stopping you from legally going over there, knocking on the door, and having a conversation as a private citizen with them before you close. A seller recently tried to stick me with two overdue sewage bills on a duplex. The plan was to keep quiet and hope my closing company didn't find out the tenants were behind on this municipal bill.

Poonam Hemrajani · Answer

I did a cash purchase in Georgetown TX in Jan 2021, our timeline for the deal was 15 days. We wanted our names on the lease so that we have legal rights to take any actions if needed. So to prepare for that my realtor talked to the tenant once we paid the initial payment and told that they will continue paying the same rent, we asked them until what month they would like to lease it , we extended the lease period for entire 1 year as we were still in pandemic and did not want them to be forced to move. They had an elderly person in the house so we did not want them to worry about moving until everything is settled.

Matt Slease · Answer

Inspection is done and the loan is in underwriting, just waiting on a closing date.  Still probably 2 weeks away.

That's a good idea, maybe I'll wait until the final walkthrough

When to start communication with inherited tenant

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