When you buy a property, you buy all the stuff that comes with it: deed restrictions, easements, AND LEASES. You MUST honor the lease. These people have an INTEREST in the property and it transfer with ownership. You can NOT just kick people out because you don’t like the lease.
As to your other question, you are most likely dealing with a local housing authority, NOT directly with HUD. The HA makes the rules (under HUD guidelines), they just use HUD’s money. Welcome to the world of Sec8 landlording. It can be profitable, but you MUST play THEIR game, THEIR way.
Greetings, I hope everyone had a safe & happy new year.
I am posting this message in hopes of getting some good opinions. I am purchasing a property which I have a lease option on. My option is up next month & I am ready to close. My problem is the tenants in the property are hud tenants, and their Hud lease is with the previous owner. I feel I have the right to serve notice to the tenants when I close on this property if I choose to. In my conversations with my local hud manager, she told me I would have to honor the Hud lease until its expiration. My gut feeling tells me she is blowing smoke up my (you know what). How is it I have to honor a contract that I am not a party to?
As an aside to this question, I haven’t definitely decided to get rid of the hud tenants (although they have been a minor pain since I took over management of the property). I do know however that Hud is giving all landlords a $25 rental increase when all current Hud leases expire. I am wondering why I do not qualify for this $25 increase because the current Hud lease with the current owner will soon be null & void?
Any opinions would be greatly apreciated!
Posted by David Krulac on January 10, 2007 at 23:09:37:
HUD leases and all leases in my state are good until they espire, even if the property is sold. I expect that different states may have different laws, but many states follow that same procedure. Here at least that lease as well all leases are good until the original expiration. it just a part of the business and is why you should always look at the leases before buying a property.
Personally I like to buy vacant rental properties. and if I were selling I would have short fuses on my leases even month to month, just as an additional selling point for the buyer, so that they could raise rents if they wanted to upon becoming the owner.
Posted by Natalie-VA on January 06, 2007 at 09:54:55:
Kevin,
Also not legal advice, but to clarify further what dutch said, the lease runs with the house. It doesn’t matter if it’s HUD or not. You’re probably going to have to honor that lease.