I'm buying a rental property and bank is asking for new lease and couple months rent. Tenant has a lease. Is this legal?

Asked by Mrs. Mary, Nashua, NH Mon Sep 9, 2013

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Melissa Higg…, Agent, Bedford, NH
Sat Jul 12, 2014
The lease itself - provided it has all elements of a legal contract - is binding. That said, in a situation like this I would speak to an attorney and provide detailed information so they may accurately advise you because there are some (very few) exceptions to the law.

I want to address another specific part of your question, even though quite some time has passed since it was posted, because the issue of deposits is one that is regulated by law in this state. In New Hampshire (and there are very few exceptions here) a landlord may charge a tenant one month's rent (first month) and a security deposit (not to exceed a month's worth of rent) when the lease agreement is initially created. Landlords may not charge additional money under the majority of circumstances. For example, in New Hampshire a landlord may not ask for the first month, last month, and security deposit up front. Additionally, a landlord may not ask for other deposits such as a pet deposit in addition to a security deposit equal to a month of rent and the first month of rent. If a landlord is asking for additional money, after a tenant already has a lease, I would advise contacting an attorney to find out if there are any exceptions to the law in New Hampshire that allow for that.

If you need any assistance or guidance concerning rentals or the rental process please feel free to contact me.
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George Rauh, Agent, Bedford, NH
Sat Apr 5, 2014
oooh! Forgot one other thing. I am just taking this from the thought you are new to the income property thing. IF not please, don't take anything said wrong or...

Anyway, another good piece of advice if you are a new person:
get yourself a great CPA!
make the building an LLC thru the state. example: 123 South Street becomes 123 South Street LLC for $100.00 per year.
reason and logic? IF the porch, as example, falls down from too may tenants celebrating say the 4th of July and several die. This keeps the survivors and other heirs from taking your house away. Sort of a firewall or stop gap to having troubles leap from one building to another.

You can see, I enjoy what I do. Good luck!
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George Rauh, Agent, Bedford, NH
Sat Apr 5, 2014
In the state of NH leases are stated 'to heirs and successors' in the beginning of the lease, that covers that. Couple of months rent? You must be talking about Mass where you can ask for a first and last months rent. In NH it is a security deposit, and first months rent. Maybe someone is not understanding the security deposit word and how it works and thus I will default to a good attorney to continue this discussion.

Someplace in the dialogue should be rents and security. Security deposits that should be in a separate account, with a bank number or routing number and account number and all of the security deposits.

IF you are a new, never owned income property, you want to get involved with NHPOA in Nashua/Manchester. They can also give you some sound advice.

My name is George Rauh, I am a seasoned 30 year plus landlord, and work for a property management company. Please feel free to stop in, coffee is hot, advice/conversation is always free.

George Rauh
The Resource Companies
445 Maple St.
Manchester NH 03103
direct: 603-930-3344
office: 603-625-2000
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Charlotte Ma…, Agent, Nashua, NH
Tue Jan 14, 2014
Send me an email to answer your question if it has not been answered.
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Daniel Wendel, Home Buyer, Nashua, NH
Sat Dec 21, 2013
If the tenant has a lease, you are bound by the terms of that lease. So it is not legal for you to demand a new lease with a couple months' rent. The bank IS allowed to refuse to lend you money if they don't think your financial situation is strong enough. So, you are kind of at the mercy of your tenants. If they are willing to sign a new lease and give you that money up front, great. But if not, you'll have to either improve your financial situation some other way, or find another loan with another bank.
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Jonathan Rob…, Agent, Lewiston, ME
Sun Sep 15, 2013
That is a good question feel free to call me anytime. I am here to answer all the the questions I can.

Thank you,


JOnathan
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Kim Benedict, Agent, Overland Park, KS
Mon Sep 9, 2013
Check the guidelines in your state, if its an investment property that could be why they are asking for new lease from tenet or is the lease ready to expire... ? Also need to check on how many months you can collect from a tenet legally... most sates have laws, and if they are seniors it can be a sticky situation if your not careful! Other than that it don't sound right just to get a loan.
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Tim Dolan -…, Agent, Nashua, NH
Mon Sep 9, 2013
IMHO it is not illegal but unusual. I've never had to rewrite/extend to lease in order to get a loan. They probably want to ensure you have sufficient reserves in case of vacancy.

How many units are there? Maybe rules are different with more than 4 units. Tim Dolan.
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