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Hi I bought a single tenant commercial shop who is not on lease contact but he is paying rant on time. I want him to sign the 1 year lease contact. He is taking time to sign the contact and whenever I ask him about the leasing papers he says he has not signed yet this is been going on for 2 months. As a landlord, am I risking anything without having any legal contact in place for the tenant?
what is the risk involved he is doesn't sing the lease document?
Was he under a lease agreement with the prior owner when you bought the building? If so, and if it hasn't expired, that lease would still be valid.
If there is no lease whatsoever, if there was a month-to-month agreement, or if there was only a verbal agreement, then he would be a month-to-month tenant. Laws vary by state, but it is usually easier to evict a month-to-month tenant as opposed to someone with a lease. The primary downside is that the tenant can also up and move on short notice, and is not bound for a specified term.
You could always say that you're thinking about raising the rent, but that you'll keep the rent as-is if he can sign the lease ASAP. Again, the primary risk is that he could opt to move and you'd be stuck with a vacant building for a while.
If you don't have documentation from the previous owner, make sure to document the condition of the building before entering a lease. Had he paid a security deposit or last month's rent to the prior owner?
Maybe he is not sure about the 1 year lease term? Possibly you can do the lease as 'month-to-month' which means either party can give 30 day notice to end the lease. Also with month-to-month the landlord can raise the rent or change the rules with 30 day notice.
IMO, having month to month lease has advantages for the landlord. You can decide that the tenant is a pain in the neck and you simply give 30 day notice to end lease and you don't have to wait until lease end for this.
Even if his lease has expired, there should be something in there that states what happens if it goes month to month. He basically is still agreeing to follow all the rules set forth in the lease. An expiration doesn't void the contract. There is an automatic month to month clause.
Tenant was ready for 1 yr lease I prepared the lease papers and gave it to him for his signature. its been almost 3 month he is not signing them whenever I message him or call him he says he will sign it and send it. Basically I am tired chasing him. I do not know what's there in his mind. I do not want to chase him anymore but I would like to know what is risk having a tenant without lease agreement although I have a old lease which expired years ago from previous owner. Right now I do not want to vacate him as he is the only tenants on the property once I get couple of tenants then I want to talk to him but I do not want to risk anything without not being on lease.
from your great answers what I understand is, there is no risk expect for the trash or move out thing. please let me know if a tenant can take on me for anything or should i be careful of anything
he is not available in his store. he has multiple stores so he manages with employees. I went couple of times but employee says he is not here we will let him know that you are here. I can only reach him either by phone or message and his standard answer is I got the lease papers I will look into it and sign it but it is not happenining
that's why I wanted to know whether I am in risk not having the lease in place
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