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When buying any real estate, there is a long list of issues that must be considered. When buying rental properties, issues related to existing tenants should be near the top of the list. Existing tenants in investment property can be either assets or liabilities. Whenever you buy the tenants with the real estate, protect yourself by covering certain issues in the purchase contract.
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First, you want to avoid the possibility of post-closing claims from continuing tenants regarding rents, deposits, or lease-related agreements that were not disclosed to you by the seller. A lease transfers with transfer of property ownership, so any claim of a previous tenant against the seller can be valid against the buyer. The buyer become liable to existing tenants for security deposits (and any other potentially refundable amounts) whether or not the buyer received credit for those amounts at close of escrow.
Second, the contract should require that legal possession of vacant units be verified to the degree possible. This is usually most easily done by requiring copies of the most recent documentation related to the vacant units, specifically, any written notices from the ex-tenant regarding intent to terminate tenancy or, better yet, a move-out checklist signed by the ex-tenant.
Third, the contract should require that the seller provide good readable copies of all lease documentation including amendments, required lead law disclosures, move-in checklists, and rent payment records immediately following acceptance of the offer, with the originals of all documents signed by tenants to be turned over at close of escrow. Lease documents are exceedingly important for two reasons.
Fourth, the contract must provide that any deposits held by the seller at time of closing will be credited to you at close of escrow, including those of previous tenants not yet returned or for which accounting regarding amounts not returned has not been provided.
Finally, although its use is hopefully never required, the contract should include warranties and indemnities from the seller regarding claims from both previous applicants and tenants and claims. Top 5 Reasons Why A Canadian Pharmacy Online Is Safe Facebook Online Advertisizing Campaign Watch Utah Jazz vs Oklahoma City Thunder Online Consider These 2 Major Steps Before You Even Begin Promoting Online Advertising a business with pop up banners How to Find The Best LED TV Reviews Online Promotional Items for Effective and Successful Business Promotion Watch San Francisco Giants vs Los Angeles Angels on PC Live Online Online Technical Support – How to Choose the Right One Watch Washington Wizards vs Los Angeles Clippers 2011 Games abd scores Online Learn SQL Online with SQL certification Watch Seattle Mariners vs Colorado Rockies Online MLB Links Live Online cover Quotes - Use internet to Bring Down Your Insurance cover expenses