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Good morning,
We are closing on a home tomorrow. Our agreement states we will received occupancy at closing. Currently, there is a tenant in the home that was given notification to vacate months ago according to our real estate agent (who is also representing the tenant in her new home purchase). The tenant wants to stay in the home until November 8th. We are willing to compromise to November 2nd. What are our options? How do we protect ourselves in this situation? My thought is to send a certified letter notifying her that we expect her to vacate the home by November 2nd.
Thanks!
It's too bad that your agent is acting as a dual agent in this situation as you don't have someone looking out for your best interest. You could have your agent draw up a lease with the pertinent information, and the tenant should pay rent to you.
However, I'm not certain I would be willing to go that route. The tenant will (presumably?) be staying beyond their original date to vacate, what are you going to do if they take it upon themselves to say there the 6 days beyond November 2nd? What if their closing is delayed? Sure, you could go through the eviction process but that takes months. What is your recourse if they do not vacate on November 2nd?
^^Like he said, talk to a real estate attorney that is working in your best interest.
You gave plenty of time. It is very lengthy and difficult process to evict someone if they decide they want to stay after all. You have a non-ambiguous contract. Stick with it. Personally I would not close with tenants in the house. At that point they become your problem, and while everything might go fine, there is the potential to get ugly, expensive and jeopardize your own mortgage. Once you own the house and they're still in it - you have little recourse but to use the court system. I wouldn't be willing to take on the potential for future legal headaches. Can you delay closing?
I would not close on the house until it is empty.
Do not ASK that the closing be delayed, TELL the seller, the title insurance company, and your lender that the closing WILL NOT take place until the house is empty, PERIOD!
" Our agreement states we will received occupancy at closing."
You have a signed contract. Hold everybody to the terms of that contract. You neither need nor should you want becoming a landlord the minute the papers are signed.
Keep in mind that the tenants need to be out in time for you to make a pre-closing inspection of the property. If the property is not in decent condition (YOUR definition of "decent"), delay closing. If the tenants leave it dirty and/or damaged, you should require that it be put right before closing!
At closing, ask innocently if the property is vacated. Be able to verify it is not. Delay closing by 1 week, but stipulate that any further postponement would be considered by you as a breach of contract and you would seek full recovery of your expenses (such as home inspection, fees, etc).
I also wouldn't close until it was empty. In that way you'll be able to do the final walk-through and see the house as you will occupy it, that is, how the tenants left the place. It would stink if you closed, let them stay, and then as they went out the door they trashed the house. Not that there aren't remedies for that, but why go through all the headaches. As the buyer, your cards in this game carry more weight than the seller's, so you can be much more (justifiably) demanding right now.
Had the same thing happen to me on a home I was buying...
Here is my solution.
Told the sellers I would close as scheduled provided 25k be left in Escrow to cover unpaid rent, damages and lawyer costs...
I determined daily charge as the sum of Principal, Interest, Taxes and Insurance...
It took 6 weeks for the tenant to vacate and in the process took the appliances... which were in my purchase contract.
The sellers actually paid the tenant to move...
In the end I came out just fine because I had planned to do some renovations prior to moving in...
Delaying the closing would mean loan rate lock expiring, loan docs, etc...
Last edited by Ultrarunner; 10-20-2015 at 12:28 PM..
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