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Re: Buying an apt with tenant in place
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Just can't stay away
 
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+1 on have it be delivered vacant at closing. seller's responsibility. you don't want to get stuck in landlord-tenant situation when you just want to live there yourself. takes a while and a whole lot of hassle to kick a tenant out once he is "yours".
Posted on: 2014/9/3 2:46
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Re: Buying an apt with tenant in place
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Home away from home
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This should be painless. Have your attorney for closing stipulate that the apartment must be vacant by closing. Actually, have them give the tenant notice that the you will need the place as your primary residence so they will need to vacate. Give the tenants at least 60 days. Your mortgage documents will likely require that you move in within 30 or 60 days after closing anyway if you told them you are purchasing the place to live in it.
I wouldnt walk away if the seller balks. If you like the place purchase it but have your attorney hold back money in escrow at closing to cover removing the tenant, rent for 2 months in case the tenant refuses to pay rent after you close, and money to cover any damage the tenant causes. Give the tenant notice on the day you close stating that you need the place to live in it. NJ laws are pretty tenant friendly but if you are purchasing a primary residence things swing back in your favor. With your mortgage documents showing this is your primary residence and a requirement that you move in by x date, you will likely get the tenant out pretty quickly. The chance you are taking by waiting until after you close to get the tenant out is that if the tenant cause any damage to the place, any amount beyond the money in escrow will be out of your pocket. Try to have the seller get the tenant out, but if that can't happen there are alternatives that have some built-in protection.
Posted on: 2014/8/28 15:34
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Re: Buying an apt with tenant in place
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Home away from home
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If you are able to get the property vacated make sure the place is in order before you take ownership. I knew of a place where the tenants trashed the place and damaged the pipes due to being "thrown out".
Posted on: 2014/8/28 11:18
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Get on your bikes and ride !
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Re: Buying an apt with tenant in place
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Home away from home
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9 out of 10, it will be headaches for you. Why buy into someone else's problem? Sellers normally do not sell their investment when it is still rented generating cash with good tenant, especially single unit properties.
Get the seller to get rid of the tenant and deliver the property vacant, especially since you want to use it as primary not investment. You hold the leverage before signing over your cash. As soon as you close, everything becomes your problem. Reality is NJ is a 100% pro tenant anti landlord state, so if it is indeed a problem tenant, you are stuck with at least a year worth of legal headaches to evict them. If you really want the property and seller refuse to get rid of the tenant siting contractual obligations. Have him produce the signed rental contract, copies of the actual rent check for the last 6 months, as well as his bank statement showing those checks getting deposited and not bounced. Also you need to run a background check on the tenant yourself to check for credit score + employment and just go talk to the tenant you can tell right off the bat if it's trouble or not. Finally dont forgot to include the tentant's security deposit as credit to you in your closing. I would walk away.
Posted on: 2014/8/27 20:14
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Re: Buying an apt with tenant in place
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Home away from home
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Quote:
How is that fair?
Posted on: 2014/8/27 18:48
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Re: Buying an apt with tenant in place
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Home away from home
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Pretty sure the landlord's rights to occupancy don't outweigh the tenant's rights. I've heard horror stories along these lines.
If you want to understand tenant's rights and whether or not the tenant has to move at the end of a lease, review this: NJ Tenant's Rights Manual
Posted on: 2014/8/27 16:11
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Re: Buying an apt with tenant in place
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Just can't stay away
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When we bought our 3-family house (two 1-BR rentals plus 2-BR duplex) it was fully occupied. We wanted to live in the duplex so we had the sellers attorney prepare a Notice to Quit. I believe this gave them at least 60 days to vacate. Can't remember if they had a lease in place. We didn't have any problems.
Posted on: 2014/8/27 16:06
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Re: Buying an apt with tenant in place
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Home away from home
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look at their lease, there may be a clause that addresses this.
That this will be your permanent residence and not an investment property is very important and your rights to occupancy might outweigh those of the tenant.
Posted on: 2014/8/27 15:55
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Re: Buying an apt with tenant in place
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Quite a regular
Joined:
2010/10/21 21:07 Last Login : 2015/10/29 22:56 From Jersey City, NJ
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Quote:
Thanks for sharing this - I hope the seller is motivated to sell and get the tenant out. Thanks for sharing the numbers too b/c I've seen this happen in Manhattan & Brooklyn and the buyouts were more in the $10k and up range for a $1500 apt. The apt here is a one bedroom and the rent is probably less than $1500.
Posted on: 2014/8/27 15:51
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Re: Buying an apt with tenant in place
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Quite a regular
Joined:
2010/10/21 21:07 Last Login : 2015/10/29 22:56 From Jersey City, NJ
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Quote:
Thanks for this insight. I really want this apt, and I'm betting that the current owner has no incentive to get the tenant out (yet). I know a couple of building owners with 4-6 units and they boast about how the state is pretty fair in terms not being pro-tenant like NYC. It's really good to hear other people's perspectives. Thank you!
Posted on: 2014/8/27 15:48
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Re: Buying an apt with tenant in place
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Home away from home
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I would ask the seller to take care of it. When we bought, a part of the contract was that the building was vacant at closing. The burden was on the seller to get the renters out (they all happened to be on month-to-month leases, and it was pretty uneventful).
If the seller is motivated, s/he will buy out the tenant or what have you to end the lease early. Otherwise, you'd be taking the tenant on, and it's possible that you wouldn't be able to move in for some time. Renters have a lot of rights in NJ, and it may not be as easy as assuming that they will simply vacate when the lease is up. If they have a great deal and it's a competitive rental market, they won't have any incentive to make your life easier so you can move in. An example...someone bought our neighbors building, and he wanted to remodel the apartments and jack up the rents. The renters were on month-to-month but liked their space as is, and it was super cheap and they wanted a long term lease similar to what they were currently paying. They could have strung the new landlord on for many, many months. So the renters proposed a buy out. I think it was in the neighborhood of $2k (plus their security deposit) to move out asap. It worked out great for both parties. Not sure if all three apartments worked out that deal or just the ones that we knew. But potentially, the new landlord had to pony up $6K to clear the place out.
Posted on: 2014/8/27 15:31
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Re: Buying an apt with tenant in place
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Home away from home
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Quote:
I would really consult a lawyer on this one - no doubt the issue will come up at closing anyway - but it is my understanding that under New Jersey law, only the tenant can actually decide to leave. You can't make them leave after the lease ends, you must give them the option to stay, even if means putting them on a month-to-month lease. If they quit paying rent, whether under the old lease or the new one you set up, then you can initiate eviction procedures, but of course that takes time in New Jersey, which is a very pro-tenant state. Other people may claim different experiences with this type of situation and know more about the laws, but that is my understanding. Talk to an attorney on this one because you could be walking into a serious legal nightmare. I've heard a lot of horror stories on the subject.
Posted on: 2014/8/27 15:20
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Buying an apt with tenant in place
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Quite a regular
Joined:
2010/10/21 21:07 Last Login : 2015/10/29 22:56 From Jersey City, NJ
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Hi neighbors, I'm looking for some info--- I'm not finding much online. I want to buy an apt in JC that is currently being rented out to a tenant. My plan is to buy and have it be my primary residence. Do you know what the laws are around this in JC (e.g., do I have to wait till his lease is up, etc)? Anyone experience this and willing to share? Many thanks!
Posted on: 2014/8/27 15:01
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