Inheriting tenants on a Duplex in Oakland

[Andy Halverson]

Hi BP fam, 

After listening to the podcast and doing my research, I was able to secure my first property to do a house hack with. This is a duplex where one unit is currently occupied. The tenant was related to the seller and has been paying below market rent. From the estoppel and all the info I have received, this tenant has been paying rent on time and has been living in the unit for the past 10 years. 

Now let me be clear. My intention is not to evict this tenant and do anything to charge market rent. A quality tenant is worth it IMO and I can still make the numbers work with their current rent. I also get the sense that they want to treat their unit as a home and stay established there (i.e. kids are going to school). 

Now the issue is since the seller was renting this out to family, they most likely did not establish a lease and be a landlord "by the book". As long as they were getting payment from this relative things were fine. Now of course, when I purchased the property they provided me an estoppel along with a lease they put together last minute. I was provided another doc that showed the rent increases from previous years. It was not in line with the Rent Adjustment Program (RAP). 

I'm not necessarily looking for legal advice ( I need to do DD on my end). But in general if you inherit tenants in Oakland and all you have is an Estoppel to go off and no indication that the tenant is on a month to month, do I have the opportunity to create a new lease from scratch? Some things I wanted to implement such as asking for a security deposit (in the estoppel there stated that there was no security deposit given to the previous landlord, and changing the parking spots). I also wanted to implement RAP. Is there any way I can slightly increase the rent that is reasonable?

Seller did indicate that there is an interest in a cash for keys situation but don't want to explore that if we are both reasonable parties.