Occupants in the House You Bought?

Uh-Oh, What Now?

November 07, 2024 • Estimated Reading Time: 3 minutes

There’s a reason 400,000 professionals read this daily.

Join The AI Report, trusted by 400,000+ professionals at Google, Microsoft, and OpenAI. Get daily insights, tools, and strategies to master practical AI skills that drive results.

Buying a house only to find unexpected occupants can be quite the surprise! Imagine pulling up to your new investment and seeing a car in the driveway, lights on, and people inside. Unless you planned on inheriting tenants, this could be a hiccup. To avoid this, make sure your purchase agreement states the house will be vacant at closing.

Surprise occupants can be a problem. When buying auction properties, this isn't uncommon.

If you find people living in what is now your house, follow these steps:

  1. Learn their situation. Try to talk to them. It may be they are tenants who were paying their rent but were not advised the house was being sold (or unaware the landlord wasn't paying the mortgage).

  2. Know their legal rights, and yours. Laws regarding this type of occupancy vary widely from state to state.

  3. As permitted by local regulations, file for dispossessory and eviction as soon as possible to get the legal process started.

  4. Offer the tenants "cash for keys." We suggest you offer a lump sum of cash for them to vacate the property within an agreed upon period of time, usually 30-45 days. The payment will be reduced each day past the deadline by a pre-established daily rental rate.

  5. When the legal process gets underway, and you have reached an agreement with the occupant, you can make that agreement part of a consent agreement, thus avoiding going to court.

The "carrot and stick" approach works well and, sadly, is necessary. There are some who will not abide by your agreement unless there is some teeth behind it. The process outlined above gives you the best chance for a smooth outcome for both the occupants and for you.