Can anybody give me any insight on how this works? I thought I'd read a long time ago that a lease could be broken by new owners if the property was to be their primary residence. I don't recall where I read that, whether it was it was from a knowledgeable source, or whether it was even in reference to California. The current tenants supposedly have a lease until August. I've tried googling for information on this, but haven't come across anything definitive. Any help would be appreciated.
Buying a home in California with tenants on a lease
By millerdoggy Follow Sat, 17 Nov 2012, 7:58pm 956 views 11 comments
In Redwood City CA 94061
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Pacifica, CA
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You might try HOFO on Craig's list or the legal forum. I was looking at a property where they don't have a lease. Would be interested in that if you come across the info while you are looking.
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Scottsdale, AZ
robertoaribas's website
You have to honor the lease. Foreclosure used to end the lease, but even that is not necessarily the case today, unless you buy it at auction with the intention of living in it
In a normal sale, the lease lives on.
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What if there is no lease in California? Can I make them move if I buy it? It is a short sale.
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Los Angeles, CA
bg says
Yes, but you will have to go through the eviction process if they don't move willingly.
If it were me and I got the house, I'd hire an attorney who specializes in these things. First I'd just try to get them to move. Likely they won't. Then I'd have the attorney draft an offer to move for cash.
If that fails, you have no choice but to start eviction proceedings. The attorney really is never necessary if you know exactly what you are doing. But most people who try to cut corners by not having an attorney also are the types that will attempt to cut corners elsewhere. And that WILL NOT work when it comes to eviction paper work and the courts. Therefore its in your best interests to hire an attorney if you buy the house in this situation.
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robertoaribas's website
if you are buying a short sale, your contract should state when you will take possession of the house. If your offer says you get possession at COE, then it is the seller's problem, and perhaps the seller has already given the tenants notice.
Either way, you should settle this issue at the contract stage, NOT when you show up ready to move in. If they have no lease, their tenancy is likely month to month, and you'd have to start by giving them notice to move out.
You also need some documentation as to what deposits are held, and the condition of the home now, so that if they damage it on move out, you won't be left with a damaged home.
If you aren't in contract yet, simply put it in your contract that you get possession at close, and don't overthink it.
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Los Angeles, CA
What happenens if they wont move?
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Redwood City, CA
Thanks for the reply, Roberto. After posting I stumbled across a pdf from the California Department of Consumer Affairs that seemed to say just that. Oh well. I don't like the house enough, nor will it be a screaming deal to feel like becoming a landlord for 9 months. I'm curious about the timing of the sale though. Trying to capitalize on a big seller's market, desperate, whatever - seems like selling the house with tenants under lease for 9 more months really limits the pool of likely buyers.
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Scottsdale, AZ
robertoaribas's website
millerdoggy says
yes. I've noticed even here in Phoenix, were by some estimates 40% of the buyers are investors, leased homes still sell for less, and take longer to sell... It doesn't make sense to me, but I've observed it.
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Be careful of the city. One of my colleagues bought a duplex in Berkely that was rent controlled(who knew a duplex could be rent controlled). It took them a year and half to vacate one tenant , so they could move in. I don't know the full details or what the legal mumbo jumbo was, except he used to come and gripe everyday at the office about his purchase!
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San Ramon, CA
millerdoggy says
I saw a home like this for sale in Los Gatos. They said they were having a hard time showing it because it had tenants with big dogs. They told me no more showings and all offers must be in by last Wednesday. Apparently, they got low-balled or no offers because it was pulled off the market by Friday.
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Once you take ownership of the home, you can then give a 90 day notice to vacate the premises. They legally get 90 days to figure out where they are going to move to next. During that time, they are legally obligated to pay you monthly rent as per their lease agreement with the previous owner.