If your new purchase includes existing Tenants you need to watch this video!
So you inherited Tenants when you bought a property? That’s great news for income!
Part of your due diligence should be a Tenant Estoppel letter, aka a Confirmation of Rental Terms. In fact, your bank might even require this in addition to a certified Rent Roll.
Why is this important? Because you want to clarify how much money is where prior to closing.
Tenant Estoppel letters are a way of dotting your “i”s and crossing your “t”s. It’s a statement or record that is signed, preferably, by both the Selling landlord and the existing tenant. These documents should state:
- What’s the current rent amount
- How much of a security deposit is being held
- What is the parking arrangement / agreement.
- Who pays what utilities
- Who are the tenants / occupants.
- Who owns the appliances, fixtures and other items.
- Are there any special agreements. For example, does the tenant in Unit 2 get a discounted rent because they do lawncare. If so, what is the specific agreement?
Don’t skip this really important step anytime you purchase a property with tenants in place.
00:57 Adam Thayer, Esq.
01:31 What is a Tenant Estoppel Letter?
02:59 RIAR Language in Confirmation of Rental Terms Form
04:14 Confirming Security Deposit
06:37 Parking Spaces – Be sure to clarify
06:56 What you need is the Tenant to Sign!
07:25 Tenant Estoppel can provide proof in litigation
09:12 Custom Tenant Estoppel Certificate from Adam
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Sandi Warner, Esq. | Managing Broker
Warner Realty Group, LLC
358 Broadway, Newport, RI, 02840
Cell: 401-662-7204 | Office: 401-236-8685
Sand[email protected] RhodeIslandListings.com/Sandi-Warner/