Why You Buy The Lease When You Buy The Minneapolis Duplex

When you purchase a Minneapolis or St Paul duplex, triplex and fourplex, you not only buy a building, for better or worse, you also inherit the tenants who are in it.

You also take over the leases those tenants signed with the previous owner; regardless of what they say.

A lease is a legally binding contract. That means once signed, the terms and conditions of it can’t be altered unless all parties agree to the changes.

In other words, a new duplex owner may not raise rent, ask a tenant to leave, or to even crate a dog that’s been living in the unit unless the tenant agrees to amend the existing lease.

And, a new owner may not change an unusual lease the seller downloaded from the Internet to something more standard that conforms with Minnesota law like the Minnesota Multi Housing Association lease.

Of course, that all changes when the lease expires and automatically converts to a month to month lease. At that time, the landlord may make changes, either to the rent amount, terms, or give notice to the tenant to vacate. Proper notice must be given in accordance with city or state law, or the terms set forth in the lease.

While the terms of leases haven’t been costly to duplex sellers when there’s been so little inventory, that may change if the market does. For example, long-term leases at below market rents may result in buyers wanting to pay less for the property as a result it not generating market rate income. Or, a buyer may ask a seller to incentivize (usually pay) a tenant with challenging lease terms to leave prior to closing on the property.

If the market changes, leases may make a real difference in what a duplex sells for.