Problems with assuming tenant

[davidc]

I am in the process of purchasing a property with a tenant living there. But I am not sure what due dilligence I should do to make sure the tenant is the one I want. I am going to ask for lease agreement from the seller. I have couple of questions though:

• Do I need to ask the tenant to sign an acknowledgement for the lease agreement, deposit and rent?
• Do I need to ask the tenant to fill out an application form and do the credit check before removing the condition?
  Do I have to sign a new lease with the tenant because the current lease doesn't have my name on it?

Any input would be appreciated.

 

[invst4profit]

The answers you are seeking depend on what provence your property is in. If you check with your provincial RTA you should find everything you need or just let us know your provence.

 

[JimWhitelaw]

[quote user=davidc]

• Do I need to ask the tenant to sign an acknowledgement for the lease agreement, deposit and rent?
• Do I need to ask the tenant to fill out an application form and do the credit check before removing the condition?
• Do I have to sign a new lease with the tenant because the current lease doesn't have my name on it?

[list type=decimal]
Yes, you should do this. There's a template for that purpose in the downloads section.
There might be some Provincial legislation around what you can do here. Regardless, you should do what you need to in order to be comfortable with the tenant. At a bare minimum, get updated contact and work info, and verify it.
No, but you should have the tenant sign a lease amendment changing the name and address of service for the landlord.
[/list type=decimal]

 

[Jeffersonn]

of course, you have to sign those agreements with tenant and make sure that all the conditions that you are asking, tenant reads and signs accordingly.All the terms should be discussed between you and the tenant.These legal documents will serve the purpose of proof of your lease and you will be out of any trouble what so ever in the future.



Scottsdale Apartments

 

[davidc]

Thanks a lot for all advices. The property I am buying is in Edmonton.



Jim, is it possible for me to get all those things done before removing conditions? As to the lease amendment, is there a sample that can downloaded?



Thanks.

 

[JimWhitelaw]

Tried attaching a file and got website errors. Here's the text of the lease amendment form I use:



Amendment to Residential Tenancy
Agreement






01/02/11







This document amends the lease agreement for the suite described
as:

















rented to

















The amendment to the lease is
as follows:







Change the `Landlord` given in the
agreement to:



























All other terms of the
agreement remain unchanged and in full effect.












_________________________________________


Tenant







­_________________________________________


Tenant







_________________________________________


Landlord

 

[RedlineBrett]

Put a condition in your offer that makes it subject to an acceptable review of the current lease. If you like the lease that the tenant is on you can assume it. Otherwise the fine print of the offer stipulates that the property must be given to you in vacant possession and the seller may need to give the tenant 90 days notice to terminate their lease on account of a sale.



If you like the tenant but just want them on your own lease you can ask them to sign a mutual release with the seller at the same time they sign a new lease with you. You can make the mutual release conditional upon you removing all conditions on the purchase contract and following through with the deal. Then the tenant can decide if they'd rather move out and sign a different lease somewhere else or just stay put and sign a different lease with you. In my experience unless you are raising the rents significantly they'll stay put.

 

[davidc]

Great. Thanks for all comments. It really helps.

 

[Thomas Beyer]

It is NOT COMMON to ask the seller to divulge details on the tenant except his name, his security deposit, his rent and his move-in date, usually by getting a copy of the original lease.



The purchase contract usually has a term that states that the new buyer assumes the lease(s) and all its terms.



It is not common for the seller to ask tenant(s) to leave. It is illegal in many province in fact. The existing (and the new) landlord has to honour the existing lease, and that may require a 3 month termination or longer.



If you are a buyer, you decide on property inspection if you like the property and the condition the current tenant put the property in, given those leasing facts. Then you decide to buy .. or not !



Once you are the owner you then follow the rules laid out in the provincial landlord-tenant act and that may allow you to



a) raise the rent by a certain $ amount by certain dates

b) terminate lease with certain payments due to tenant or by certain dates

c) lower the lease

d) keep on trucking 'as is"

e) ask tenant to leave early with a payment that is acceptable to him (say $2000 + moving cost)



If you are a buyer you must be aware of the provincial landlord-tenant act so you can ask the existing owner if in fact you must have a vacant possession, and in most provinces that means 3 months notice or more ! Govern your purchasing contract language accordingly !