Locked down by leases

I have a park with current leases that don’t expire until 12 months later. The leases don’t spell out who pays for water even though the previous owner has been paying for the water. It just says the tenant must pay for the other utilities (did not list water). I want to pass this onto the tenants. Any creative ways to not get locked down by these leases?

Creative and legal are very different things. If your lease does not give you the right to pass on water then you need to do your part and wait. If you’re not sure then you need an attorney in the state to assist you. You can get in real trouble meddling with this illegally.

Also you need to look into the legalities of submetering for your state. I had to register with our Public Utility Commission (PUC) to submeter to our tenants. We also have to provide pamphlets of tenant rights for electricity and water submetering as part of the leases. In Texas you’d be stuck waiting out the 12 month agreement you put in place unless the tenant agrees to novate the lease.

1 Like

Agreed, you’re going to need to talk to an attorney.

Even in a lax state, you’re probably not going to be able to push back water and sewer costs until the expiration of the leases. The lease is vague and doesn’t define who is responsible for water and sewer, and the previous owner choosing to pay for water set a precedent that the park is paying for water.

1 Like

First step is to study your state landlord tenant laws/regulations. Don’t waste money consulting a lawyer until you have first studied the legislation that is available. IT is your responsibility as a landlord to know the regulations.
The rental business is not that complicated when you have the legislation readily available and is usually easy to understand. For clarification there is usually a local landlord organisation that can provide free advice.
You will find a term lease is binding and can not be modified without a tenants approval. A term lease places the tenant in control of your property for the duration of that lease which is why most landlords will avoid using them. Worst case you wait till all leases expire and then have all residents on M2M leases going forward. Your state regulations will then define notification periods for implementing changes.

1 Like

That’s one of the reasons why we went with 6 months (then month-month), instead of a full year lease. That way, we’d only have to wait 6 months to make changes.

Okay. A small update and thought. Real estate leases are not automatically inherited at closing, right? There needs to be an assignment signed to inherit it. Since I never signed anything like that, I never inherited the leases with the seller’s terms. So essentially I can raise rents immediately and provide them with new leases?

The Texas MHA Space Lease Agreement specifically says that the lease shall be honored by the new owner in the event of a sale…

Your mileage may vary, but I would probably honor them if they do not say so as to avoid legal headaches.



How significant is the dollar amount/percentage of the increase? I raised the dollar value on any new tenants, but ticking off your current base in the first month with no improvements is not going to be a good start to the relationship.

Just because we can doesn’t mean we should.

1 Like

$50 increase. Mine leases don’t say anything about transferring so I think I’m free to start new leases…

It is not your lease that determines if the lease transfers with ownership. You need to study and understand your state regulations to be in business. Thinking you are free to start new leases is not good enough…learn the laws.
My money is on you having to honour existing leases.

Flat out, no. You cannot disclaim inheriting the leases because for sure at least some aspects of the the leases run with the land. If you want to battle out which aspects of the lease run with the land, be my guest in the court of your state.

1 Like