Buying an apartment with a tenant in it usually means taking over a lease that is still in force, not buying an empty unit. Before paying a deposit, confirm five things: the lease and its remaining term, the tenant's deposit, payment status, your own plan for the unit, and the commitments written into the purchase deposit agreement.
1. Get the lease and read the remaining term
This is the first document to see, before the price. Read the start and end dates, rent, payment cycle, renewal and early termination clauses. A unit with eighteen months left at a long-agreed rent is a different asset from one about to expire. If the seller cannot produce the lease, do not pay a deposit.
2. Ask who holds the tenant's deposit
The tenant paid a deposit to the seller. On a change of owner it must be passed to the buyer or deducted from the price; otherwise the buyer may have to refund money never received. Write the amount and the method into the sale documents.
3. Check the tenant is living there as the lease says
View the unit with the tenant's consent, match the occupants to the signatories, compare the furniture to the inventory, and ask the building office about outstanding management fees and utilities. A sublease the lease does not allow must be resolved before purchase.
4. Decide: live in it or keep renting it out
| Purpose | Extra steps |
|---|---|
| Keep renting | Confirm the tenant stays, sign an amendment naming the new landlord, agree the new rent account |
| Live in it | Ask when the tenant wants to leave; do not pay a deposit without a written handover date |
| Resell | Consider the lease term, since the next buyer will ask the same questions |
A lease in force does not end because the unit is sold. Moving the tenant out early requires their agreement, often with compensation or an early deposit refund.
5. Put the commitments in the deposit agreement
The agreement should state that the seller has provided the full lease and all appendices, will not amend the lease after the deposit, and will hand over the tenant's deposit and rent entitlement on a stated date. For high-value deals, have a lawyer review it.
| Remember before paying a deposit | |
| 1 | Obtain and read the lease, noting the remaining term. |
| 2 | Record how the tenant deposit is transferred. |
| 3 | Meet the tenant and check outstanding fees and utilities. |
| 4 | Fix your purpose and the handover date in writing. |
| 5 | Put the seller commitments about the lease in the deposit agreement. |
This is general information and not legal advice for a specific transaction.
