Oh oh. But not uncommon.
Let me start by saying that managing your own properties from the start is the way to go.
Because you need to know the laws and what you can and can’t do as a landlord. Perhaps you have no interest in managing the properties yourself and are considering hiring a management company immediately. *Warning* – if you don’t understand property management, you won’t know how to hire a property management company or if they do a good job. I’m pretty confident when I say that most property management companies aren’t good.
Now to the current problem – There is a tenant in your property!
1. When you purchased the property, you should have received tenant deposits and contracts from the previous landlord. If you didn’t, you got off to a bad start. If the landlord says they didn’t have contracts or bonds with the tenant but the tenant says they had a contract with the previous landlord, ask the tenant for copies of the contract they have. If they also cannot produce a contract, nothing binds you to the previous conditions.
2. I hope you have received the deposits from the tenants because when they move out you want something to cover any repairs you will need to do, plus you will be responsible for repaying any deposit they have paid that is not used for unpaid rent or damages. (even if they paid it to the previous owner who didn’t pass it on to you).
3. You are legally bound to abide by any prior contracts and terms that tenants have (again, provided you have a copy of those agreements). Consumer protection laws protect the renter and bind you to their prior agreements until those agreements expire.
4. If there is no contract, immediately send all tenants your own new contracts. They are authorized to sign or move. You will then manage your property on your terms.
5. Owning a property and managing tenants are two very different activities. You need to learn property management if you are going to have tenants. I wrote a book – The Essential Owners Manual – available on Amazon, which is a great place to start.
You own the property – you are solely responsible. You need good contracts and it is essential that you know your local laws and how to deal with tenants.
6. When you decide to hire a property management company (PM), know that they manage according to your documents and rules. I owned a PM business for years and most owners came in with their own pre-signed contracts and rules. Some pets allowed – some didn’t; some allowed smoking – some didn’t etc etc. We applied the rules of the owners. What you do with your property is up to you – the PM company enforces your rules (if the company is good…).
The management of properties and/or tenants comes down to contracts. And your local laws. Every state is different. Know your laws.
Plus, owning rental properties is a business. When a tenant is “bad”, including late payment, start expulsion AT ONCE. I listen sympathetically to their reasons, but the rules are the rules and don’t bend them because, if you give in to one, you have to give in to all (consumer protection laws, again).
Have you ever bought a property with a tenant already in place?