Dallas-Fort Worth Real Estate Investor Club

Hi Cyntia,

You have very good concerns on buying a 1/2 of a Duplex.  Here's my feedback:

1.  Yes you do have shared maintenance responsibilities such as roof, foundation, trees, pavements etc..so it's best that you get in touch with the other owner.  Get their information so that you can contact them in the future.  Keep in mind you will need to have good rapport with them to get some level of cooperation for anything that comes up in the future.  It's doable though.

2.  As soon as you close, you should receive a copy of the lease, information on the tenants qualifications and a transfer of their security deposit.  You can't just raise their rent immediately.  The good news is that the lease is month 2 month.  So once you own it, you can negotiate a new longer term lease with the tenants.   But here's what you might consider.   A $50.00 per month rent increase could rock the boat.  Since they are month to month right now, they could give you a 30 day notice and move out if they can't afford that much more per month.  Then you are going to be stuck with a vacancy right off the bat.  You might consider sitting down and talking with them about their plans to stay.  Here's what I have done to accomplish this:  I say that we are going to set up a new lease agreement for a one year term.   They can stay month to month, but you will have to structure a new lease that is month to month with your new rent rate.  I make the month to month rent rate higher than the 1 year term.  This helps to sway them to sign a longer term lease.  You could offer 2 years or more also.  Its all in the negotiation.  But you will need to create a new lease agreement that is between you and them if you want to change anything about the existing lease.   Otherwise, the existing lease stays in play until you create a new one.

You might double check with your Title Company on this.  But this has been my own experience.  I always create a new lease when I inherit new tenants as soon as the existing one expires.  

Call me if you'd like to discuss further.  

Stacie Meeker

214-704-8617

I would obtain a copy of the Lease, Inventory & Property Condition Form, Pet Agreement, HOA Addendum, and the tenant's application BEFORE you sign put the property under contract. If you don't have the tenant's application how would you be able to track them down for unpaid rent, repairs, etc. if they move out. All you would have is their names and whatever information is filled in on the lease document for notices. The lease in effect should be made part of the purchase contract. The title company will need this info. to credit the Buyer on the Settlement Statement for the Security Deposit and pro rata rent. You also need to provide the tenant notice of your purchase and who is now responsible for their Security Deposit once the purchase has been completed.

Additionally, I have the Tenant complete a Commercial Property Estoppel Certificate and make that form part of the contract as well. The estoppel certificate is completed by the tenant and verifies the terms of the lease and puts the Tenant on record. By using this form I recently learned that a tenant had paid first and last month's rent plus security deposit on their initial lease. They had now lived in the property for 5 years and had executed 2 new leases and the current lease did not document that they had paid the last month's rent upon their initial move in. I have also learned that other tenant's had prepaid 6 month's rent, paid larger deposits than the lease reflected, etc by using this form. Remember, when you buy a property encumbered by a leasehold estate, you , the Buyer, will be responsible for satisfying the terms of the lease and return of any funds due from the tenants deposits.