Buying Rental Property with Tenants and Terminating Leases

If you buy a duplex that has tennents - can you terminate the lease and move in yourself?

2 Answers

You should **have an attorney review the lease **before you make the purchase.  If the seller does not reside in the property, chances are it is being sold for the same purpose--as an investment.  However, it certainly makes good economic sense to purchase a duplex for a primary residence. If the property is listed for sale, the Realtor can find out a great deal of information for you.  One thing you can ask is whether or not tenants have the intent to stay or if one might be willing to vacate and terminate the lease.  The seller may not want to approach tenants for fear of losing one or both without the assurance that the property will in fact be sold.

Once you enter into a contract, the die is cast.  And you should always check with your lender.  If the loan is for a primary residence and you cannot move in within a reasonable period of time, there may be some consequences, as rates and terms are more attractive for a primary residence loan than they are for one for an investment property. 

There is not a standard rule to follow.  Each State has there own rules concerning whether or not a buyer of a property can terminate a signed lease agreement between a tenant and the prior owner of record prior to the expiration of the lease agreement.

In some States a lease agreement runs with the land, meaning that the new owner of record must adhere to any current lease agreement that a tenant may have.  In other States there is no requirement.

Contact your State's Real Estate Commission or contact a Real Estate Attorney in your area and pose your question to them to determine your State's law's concerning whether or not you have the legal authority to terminate the current lease agreement.