If I Buy a Property, Do I Have to Honor Existing Leases?

 Posted on November 16,2023 in Residential Real Estate

Unless the apartment building you are buying is brand new, there are almost certainly tenants living in the building. As much as you may wish to start with a “clean slate” empty building and craft your community with purpose, you must honor existing leases. However, you may not be obligated to renew leases for existing tenants if you are not happy with the current renters. In most cases, you can simply allow the tenants’ leases to expire. Before you take any action, it is important to speak with a qualified Chicago real estate attorney who has experience with the sale of multi-unit buildings. Tenants’ rights is a complex area of law, and running afoul of it can lead to serious penalties. The laws that apply to renters in your building may vary by municipality and in some cases, the building. 

Do’s and Do Not’s for Dealing With Existing Tenants 

In many cases, the tenants already residing in the building are perfectly acceptable renters to the new owner. In others, the new owner would like to renovate and would prefer not to keep any holdover tenants. Some helpful tips for dealing with existing tenants are: 

• Do not mass evict - Some new owners attempt to clear the building by simply finding a reason to evict everyone. It is generally fairly transparent when this happens and will not likely succeed. 
• Do evict for cause - If there are specific tenants who are causing a problem and violating their existing lease, you can proceed with evictions for those specific tenants. For example, if one tenant has caused significant damage to their unit, or smokes indoors and disturbs other tenants, you can likely evict them. 
• Do not use “self-help” - Do not attempt to give your tenants a reason to move out on your own. Actions designed to disrupt tenant’s peaceful enjoyment or make the housing units too uncomfortable to live in, such as turning the heat up to an unreasonable temperature or failing to make needed repairs, will not be regarded kindly in court. 
• Do consider existing tenants - You may find that the people already living in the building are the kind of people you want to rent to. When each tenant’s lease is up, consider whether you would like them to remain. Note that many tenants will leave on their own when the rent is raised. 

Contact a Chicago, IL, Real Estate Lawyer 

The Sherrod Law Firm, Ltd. is experienced in working with people who are seeking to buy multi-unit buildings. Our skilled Cook County, IL, real estate attorneys will guide you through the entire process, from finding the right building to dealing with existing tenants. Contact us at 312-321-6910 for a complimentary consultation.