What should be notified to tenants after purchasing a property under lease?
In purchasing real estate, you may purchase real estate that is already leased as an investment property. The real estate purchase and sale is called sales with the burden of a lease, and an existing lease contract is taken over as it is. In the explanation of important matters received when real estate is purchased, it becomes "exclusive use by a third party - yes" and "relation of right - tenant (lease)". Here, after purchasing real estate, we will explain what kind of notice is made to a tenant.
What is the purpose of the notice?
First, the purpose of notifying the lessee of a change of ownership is to notify the lessee of a change of title and a change in the person to whom rent is to be paid.
The lease is a contract between the original lessor and the current lessee. Therefore, a notice is required that the new owner has succeeded to the lessor's position. Normally, it is sufficient to make a notice of the change of lessor signed and sealed by all three parties, without making a new lease contract again.
Also, when the owner changes, the account to which rent is to be paid will change. The lessee pays monthly rent to the lessor, but if the management company is the same as the existing company, the rent will be paid to the same company. In many cases, the management company will also change and will notify the tenant of the change in the account to which rent is to be paid.
To prepare a notice signed and sealed by the new lessor and the old lessor.
The lessee is notified of the change of ownership immediately after the property transaction is completed. The notice of change should be stamped by both the old lessor and the new lessor, and the lessee should be notified.
If you receive a notice from another party pretending to be the lessor, it may be a fraud. The management company or lessor will contact the lessee in advance. Giving legitimate notice after the transaction is complete is the safest way to eliminate the tenant's concerns.
In the notice of change, we will prepare an informational letter with the address, name and seal of the old and new lessor, the date of the assignment of rights, and a statement that we would like the lessee to sign and seal the lease.
The letter will include an indication of the subject property and a description of the terms of the lease agreement. By indicating the real estate, you can confirm that the real estate to be notified is correct.
In addition, it can be confirmed whether there is a difference in the interpretation of both parties by stating the terms and conditions of the lease contract that we had a copy of beforehand. In this way, trouble later on can be avoided. It is the following details.
Real Estate Indications
- Housing number
- Total floor area
The Lease Agreement
- Property Name
- Contract Period
- Common Service Fee
- Water payment
- Security Deposit, Deposit / Deduction amount and Refund
- Contract Renewal fees, Renewal procedures fees, etc.
The trouble at the time of the contract renewal and the leaving can be prevented by having the above contents described and the tenant confirm it. Since it leads to the trouble afterwards if these small points are neglected, let's prepare the document firmly at the time of a real estate transaction.
Once the real estate transaction is complete, notify the tenant as soon as possible and have them sign and seal the confirmation. Be sure to date these documents so that you can look back and check them later when you need to confirm them. If you use a guarantor company, the procedure of the change of the lessor is carried out to the guarantor company, too. Check the necessary documents in advance and be prepared to get the old lessor's signature at the completion of the transaction.
These procedures are designed to avoid problems later on, in order to buy an investment property and definitely get the rent. If you are considering the purchase of investment property, please contact us for more information.
Arrows International Realty Corp.