Keeping Seller on as Tenant

[RandyDalton]

I am working on an offer for a Triplex in Hamilton. The seller is currently living in the main floor unit and is wanting to stay on with a month by month tenancy and will abide by the terms of his standard agreement. This appears to be a good deal however wondering if anyone has experience doing this and how it worked out with the seller who overnight becomes a tenant?

Thanks in advance for all your posts...Randy Dalton
R&B Properties

 

[Nicola]

QUOTE (RandyDalton @ Apr 22 2009, 06:31 AM) I am working on an offer for a Triplex in Hamilton. The seller is currently living in the main floor unit and is wanting to stay on with a month by month tenancy and will abide by the terms of his standard agreement. This appears to be a good deal however wondering if anyone has experience doing this and how it worked out with the seller who overnight becomes a tenant?

Thanks in advance for all your posts...Randy Dalton
R&B Properties

My friend (non-REIN member) bought a house near Ottawa last year. The sellers were an older couple who were planning to retire out west. They wanted to stay in the house another year, but wanted the security of knowing their house was sold. In my friend`s case, this has worked out really well. They are very conscientious and are still treating it like it`s their home (not a rental).

I guess it would really depend on the seller, what his motivation for selling is, why he wants to stay as a renter and what kind of condition his place is in now...

 

[Marek2086]

We purchased a house as well and the seller is still living there. on one side it`s great since they treat the place like they still own it and they really keep it clean all around however sometimes they act as if it was still theirs and forgot they are no longer on title. So if you`re planning to do major renos you could wait till after they move out.

 

[RobAllan]

Randy:

We purchased a 12-plex in 2004 from a group of 6 partners; one of whom lived in the unit. He maintained his unit and offered to act as property superintendent which we agreed to initially on a trial basis.

Fast forward to 2009, he still rents in the building and continues as superintendent. A big plus to us as he screens new applicants knowing that he lives in the building and wants to maintain compatibility amongst the `clientele`.

Being familiar with the building (plumbing, electrical, heating etc) he can address minor fixes having a history with the building maintenance versus having to bring in outside journeymen for minor repairs, touchups, painting etc.

Interestingly enough he owns a condo unit in a nearby town that he could have easily moved into, but chooses to rent that out instead.

My 2 cents,

 

[RandyDalton]

QUOTE (RobAllan @ Apr 21 2009, 09:02 PM) Randy:

We purchased a 12-plex in 2004 from a group of 6 partners; one of whom lived in the unit. He maintained his unit and offered to act as property superintendent which we agreed to initially on a trial basis.

Fast forward to 2009, he still rents in the building and continues as superintendent. A big plus to us as he screens new applicants knowing that he lives in the building and wants to maintain compatibility amongst the `clientele`.

Being familiar with the building (plumbing, electrical, heating etc) he can address minor fixes having a history with the building maintenance versus having to bring in outside journeymen for minor repairs, touchups, painting etc.

Interestingly enough he owns a condo unit in a nearby town that he could have easily moved into, but chooses to rent that out instead.

My 2 cents,


Thank you all for your comments. We were concerned as the owner doesn`t seem to care for the unit they are in. (Owner recently took over property due to death of original owner.) Also when we offered to just push out the close date to provide the owner with the necessary time they needed to vacate it came back that they had no other plans at this time. We were worried about vendor motivation and decided to pass on the deal.

Regards...Randy D.

 

[thecrow79]

Hi,
quick question. Did you end up purchasing the property? I am in the exact same situation. currently working on a deal with the owner wanting to stay on the main floor.

 

[BarryMcGuire]

My clients who have done this say it has been difficult treating the seller as one of their normal tenants. Particularly tough telling the seller he has to pay a security deposit and , as another poster said, sellers forget they are tenants and no longer owners. Get real clear on the tenancy details and how you want it to go. In the end you make an assessment about what kind of folks you are buying from. Neat , clean and tidy generally gets you an owner who makes a good tenant.

Cheers

Barry

 

[Thomas Beyer]

Usually it is a problem, as you will do things differently, say raise rents on teh old lady downstairs, or paint the walls a different colour he doesn`t like or cut the grass only 2x/month and not 2x/week as he used to do .. DO NOT DO IT !

Owner will complain and complain about lack of grass cutting, or lack of maintenance, or this or that ..

IF you do it: he MUST MUST sign a normal residential lease agreement, PAY A SECURITY DEPOSIT, WITH THE PURCHASE AGREEMENT BEFORE YOU WAIVE CONDITIONS, ideally HIGHER than market rent so he has an incentive to move out !

 

[mponte]

I had a similar situation come up a couple of years ago where the seller wanted to stay as a tenant up stairs. So we did our due diligence on him like if he was a new tenant...needed to fill out application, credit & reference check and he needed to put in a deposit.

He has been an excellent tenant and continues to be renting the suite as of today.

We felt that as long as he met the criteria we have in place for our other tenants, his reference checks and credit checks were positive, he clearly understands the tenancy agreement and signs the lease we should consider him as a tenant which has worked well for us in this case.

I`m sure others have had different experiences but for us this one seemed to have been very positive.

 

[JulieHoffman]

HI, There.

I recommend that you make the agreement CRYSTAL clear. The seller will be emotionally attached to the house. A clear agreement in place to make sure the tenant/former owner/ person who will be (maybe) critical of anyone who moves in will decrease the likelihood of conflict.

We let the sellers stay for 4 months in a Millwoods house after we bought it. They were great. Plus we didn`t have to paint or clean it for all of that time. They were happy because they didn`t have to move to another rental while they built their house. So it can go both ways.

I hope that helps.

Best of Luck!

 

[kanabel]

QUOTE (RandyDalton @ Apr 21 2009, 03:31 PM) I am working on an offer for a Triplex in Hamilton. The seller is currently living in the main floor unit and is wanting to stay on with a month by month tenancy and will abide by the terms of his standard agreement. This appears to be a good deal however wondering if anyone has experience doing this and how it worked out with the seller who overnight becomes a tenant?

Thanks in advance for all your posts...Randy Dalton
R&B Properties

I had opposite results. I had two instances where former landlords became tenants and had to have them BOTH evicted for rent non-payment. In latter case sheriff had to come and physically throw him out with his kids. He started nice, but something had changed in the meantime. I would never do it again!
Cheers
Dejan

 

[RandyDalton]

QUOTE (thecrow79 @ Jun 3 2009, 10:17 AM) Hi,
quick question. Did you end up purchasing the property? I am in the exact same situation. currently working on a deal with the owner wanting to stay on the main floor.


Hi,

We ended up walking away from this deal due to other problems with it. Turned out to be an illegal triplex and far tooooo costly to make it legal.

We are working on another deal right now where the owner wants to stay. If you send me a PM with your email I will let you know how it goes.

Regards...Randy D.