I have a tired landlord situation. The guy does not want to be a landlord anymore. He bought the property in 11/07 with a 5 year fixed rate balloon mortgage. The interest rate is 6% with a monthly of $380 and the mortgate was for $165,000. There are tenants in the property now. I will being doing a sub2 with the landlord. Now do I keep the current lease info with the tenants or do I give them a new lease? If I decide to purchase after I do my due diligence.
As a general rule, leases convey with the property when title transfers. The buyer has to honor the terms of the leases. New lease terms can be offered when the old lease is up for renewal.
The exception to this general rule is when the property is transferred as a result fo a foreclosure action. In most states, leases can be terminated or renegotiated immediately after the property is acquired at the foreclosure sale.
I would check out laws in the state. I imagine you can write up a new lease that states the new lease replaces or supersedes a prior lease. As a last request, you can probably get your motivated seller to get the tenants to sign the new lease too.
Existing tenants are under no obligation to sign the new lease. You can ask them to sign and they just might to do it out of ignorance, but they have no obligation and you can’t force them.