BUYING A TENANT OCCUPIED PROPERTY?

What you need to ask for if you represent someone buying a property with a tenant in place?  The following should be requested as part of the buyer’s due diligence:

• Lease and any addendums – the property is subject to the lease terms.  At the end of the lease or if a month-to-month rental agreement, terms can be changed with a 30-day notice.

• Move in inspection report – the tenant cannot be charged for any damages unless there is a written move in inspection report.

• Rent ledger – this will tell the buyer whether the tenant pays rent on time.

The following need to be transferred at closing:

• Any deposits and prepaid rent (last month’s rent).

• Pro-rated rent for the month of closing.

• Keys (easy to forget if buyer isn’t taking possession at closing).

• Tenant contact information.

The seller must notify the tenant in writing that the deposit has been transferred to the buyer and the buyer must notify the tenant in writing of the Washington State bank and branch where the deposit will be held in trust, where to mail rent and who to contact in case of a problem.

We are here to help you and your clients with all aspects of the rental market. Please contact us for further assistance!

 Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.