You’re inheriting a relationship when you close on an occupied property. For investors who are getting a tenant as well as a property, there’s a slightly different playbook at closing compared to vacant properties. To avoid missteps and maximize your ROI, here’s a checklist of what to expect and prepare for at closing.

Lease Agreements and Tenant Estoppels

Before closing, it’s important to get your hands on copies of all current lease agreements. Review:

Rental terms and expiration dates
Security deposit amounts and where they’re held
Clauses related to early termination, maintenance, or rent increases

Also request tenant estoppel certificates, which confirm the lease details and verify that tenants don’t have any outstanding disputes or claims. This protects you against surprises after closing.

Prorated Rent and Deposits

At closing, rent is prorated based on the closing date. You should also receive:

Security deposits held by the seller (with documentation)
Pet deposits, if applicable
Any prepaid rent beyond the closing date

Make sure all financial transfers are clearly itemized on the settlement statement. There’s plenty of attention paid to the final price and the closing costs, but when a property is occupied, you’re thinking about these additional financial details, too.

Texas Property Code Compliance

Texas has strict landlord-tenant laws. Verify that the property complies with The Texas Property Code, specifically lock and key requirements (deadbolts and peepholes are non-negotiable), smoke detector placement and functionality, and habitability standards for plumbing, heating, and structural integrity.

If you’re inheriting tenants, the property must meet code on day one.

Tenant Communication Plan

Develop a written communication plan before closing. You’ll want to introduce yourself (or your property manager) to the tenants, share new payment instructions and maintenance contact info, and reassure them that their lease remains valid until it’s time to renew. Clear, early communication prevents confusion and maintains goodwill. It doesn’t help anyone to begin a new relationship from a place of distrust or antagonism.

Property Management Handoff

Working with a property manager can help the entire process move a lot smoother. We’re experienced with tenant relations, we know the laws around buying an occupied property, and we can make sure that everything is in order, from lease agreements to security deposits to pet policies. When you have a property manager working with you, it’s easy to manage the transfer of vendor contracts, service agreements, or repair warranties. Communication with tenants will be easier, and you’ll lean on your management partner to get access to tenant ledgers and maintenance records.

Walkthrough Logistics

Occupied properties can complicate final walkthroughs, right before you close. Coordinate:

A pre-closing visit with tenant notification
A walkthrough checklist to confirm condition and occupancy
Photos or videos (with tenant permission) for documentation

This helps establish a clear “before” condition in case of disputes.

It’s important to close with clarity, even if you’re getting an occupied investment property. Enjoy the immediate cash flow that this situation delivers.

For extra help with due diligence and the entire transition, please contact us at Trend Property & Management. We’re here to help with all your Fort Worth property management needs, and provide services throughout the surrounding Tarrant, Parker, Johnson, Hood, and Denton counties.