Home Buying in Los Angeles>Question Details

seanli0924, Home Buyer in Los Angeles, CA

What can I do if the seller won't move out after escrow closed a month and half ago and I have already leased out the house?

Asked by seanli0924, Los Angeles, CA Tue Aug 27, 2013

I recently purchased a house in Riverside, CA. Escrow closed about two months ago. I agreed to the sellers request to to live at this home for a month after the purchase because they need find a new place. Shortly after the close of escrow, I leased out this property and tenants are expected to move in by Sep 1st. My agent contacted the seller many times and seller seems to be in no hurry of moving out. I understand that I can have an attorney write a letter and file to the city to get the seller evicted. However, this process would take at least a month and I will be forced to forfeit my leasing agreement with my tenants. If this is the case and I forge the contract because the seller refuse to move out, are the seller responsible for my loss? Are there any other options available besides taking legal actions against the seller to recover my loss?

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18
Check with a lawyer. But you have to be tough.

Here's one option: Offer them $1,000 and no legal action if they move out immediately. (Or $500 and a moving truck for a day.) But they have just 24 hours to make the decision and another 24 hours to be out of there. Otherwise, you take legal action, and that includes suing them for damages--the lost tenant rent, among other thing--and legal fees.

So: An easy, quick path or a painful, expensive path.

I'm not a lawyer, so check with a lawyer immediately on that. Also, inform your prospective tenants immediately.

You may also need a more proactive agent. I'd suggest you immediately also call the agent's broker and discuss the matter with hm/her.

Hope that helps.
2 votes Thank Flag Link Tue Aug 27, 2013
Why should you pay them to move out of your house? You already paid them for it? Offering them more money doesn't make sense. A deal is a deal.
Flag Fri Jan 17, 2014
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Hi seanli0924,

You stated: "I think my only option is to take legal actions against them." You're 100% correct!

You have already bent over backwards in the past - don't bend over forward now - immediately contact a lawyer and get the eviction started! The Sellers had all of their proceeds and the capability to find temporary housing in San Diego or a convenient outlying location.

To any other Buyers facing this situation:

While normally just a simple request to have more time to move, there are potential risks and considerations that must be weighed when the Seller wants to maintain possession after close of escrow. My understanding is that allowing a Seller to occupy the property after the original possession date creates tenancy rights. As such, issues common with rental property come into play, and perhaps, a worst case scenario!

Everyone has a different level of personal risk aversion. Personally, if I were in the same situation, I would not grant the Seller's request unless all of the following terms were understood by both parties and agreed to before moving forward:

1) The exact terms of possession
2) Compensation
3) Late charges
4) Responsibility for utilities
5) Entry rights
6) Responsibility for maintenance
7) Assignment/subletting
8) Responsibility for insurance
9) Any other special terms deemed necessary.

Section two of CAR Form Purchase Agreement Addendum (PAA) was created to address the considerations above when possession is delayed. I would highly recommend you cover section two with your Realtor® to decide whether its use might be appropriate in your situation. Make no mistake; not having such an agreement would be unwise. Consider it the cheapest insurance you will ever invest in. In fact, just going through this process may change the Seller’s mind regarding a rent/lease-back.

If you do agree to allow the Seller to remain in the property I personally would 1) not go past a 30-45 day timeline, 2) at a minimum would use the PAA form to protect you, and 3) make sure that all costs/deposits to be incurred during the occupation timeline are paid directly to you from the Seller’s proceeds at close of escrow!


-Steve
1 vote Thank Flag Link Tue Aug 27, 2013
You need to start eviction proceeding immediately and yes, the seller can be held liable for damages due to the lease forfiture. contact an eviction attorney immediately and get the process started. it could take up to 6 months to get the seller out...and hopefully they wont file bankruptcy and they will just leave quickly. i hope they do not do damage to your property.

Offer them solutions, maybe a cash incentive to leave. i nope this was not a short sale, this can invalidate it with the bank.

Good luck!
1 vote Thank Flag Link Tue Aug 27, 2013
I assume you have a lease after sale agreement with the seller. Your agent should have prepared and had signed a lease agreement, not just a comment in the purchase agreement. That agreement should have specified how much the rent would be for the seller for that one month. In addition the agreement should have stated that in the event the seller fails to vacate as agreed at the end of that one month, that the rent would be $xxx per day for any days the seller holds over, and that amount should have been double or triple the ordinary rent. If your agent did not prepare such a lease and the rent is below market, why should the seller be in a hurry to leave? You should have given him a very strong incentive to move out so he did not have to pay excessive rent. Your only option now is to contact an eviction attorney. The attorney you hire should be one who specializes in evictions. The cost will probably be over $1,000 but every day you delay is an additional day of loss. The seller would be responsible for the additional rent as well as any legal costs. Your agreement with the seller should also have included a security deposit as you would with any tenant, and those cost would be deducted from the security deposit. If not you will have to sue in small claims court for the loss..
0 votes Thank Flag Link Thu Aug 14, 2014
Get a lawyer and save yourself a huge headache. Let them deal with the mess.
You don't need extra stress!
Good luck!!!!!!
0 votes Thank Flag Link Wed Aug 13, 2014
"I agreed to the sellers request to to live at this home for a month after the purchase because they need find a new place."

No good deed goes unpunished.

Your choice is write a check to an attorney or write a check to your occupant squatters.
If you choose the former, you will be advised regarding the losses you might be able to recover due to the loss of income, the result of the lost Sept 1 lease.

Before you set fire to the bridge, see if the squatters have a signed contract in place for their purchase? You may need to chat with their agent.
0 votes Thank Flag Link Wed Aug 13, 2014
This is reason one that when you close on a property it should be free and clear of all occupants and their stuff. At this point you should start legal action without any more delay and notify your new tenant or you may have some liability there too. I often use the cash for keys method to try to get someone to move but you may need a lawyer now to get things moving on an eviction. Then yes you can sue in small claims for back rent and losses
0 votes Thank Flag Link Wed Aug 13, 2014
I am currently having a similar problem. Our escrow closed last week and the sellers have refused to move out or pay rent. They have also refused to sign the form our agent drew to address the stay after the close of escrow. Since they have refused to sign the agreement I wonder if this would be considered trespassing since they are not in agreement with our lease. This is so frustrating and stressful. We can not afford to pay our rent and the mortgage on our new house, so I am really hoping our issue gets resolved as soon as possible. Any advise is greatly appreciated. Thanks!!!
0 votes Thank Flag Link Tue Aug 12, 2014
I have seen people call the Sheriff and have these types removed. The question is will your local Sheriff do that? Some will some wont. This seller is trespassing. Yes you can sue for damages.
0 votes Thank Flag Link Wed Aug 28, 2013
You absolutely need to work with a real estate attorney on tihis, Don't delay further - this is a setp you absolutely need to take, sorry to say.

Best of luck.
0 votes Thank Flag Link Tue Aug 27, 2013
Unfortunate. You have been taken advantage for your good nature. Ditto on getting an attorney involved. Since this closed with no attorney and the situation was allowed, the agents haven't done their best work here.

Threat of an eviction and a lawsuit might spur these people to get out while their credit is still unscathed. Having an attorney also include language regarding a lawsuit for damages, legal fees, etc. and that a judgement against them might harm their credit.....that sort of thing.

In NY, which is an attorney state, the matter would have been resolved at the closing table or the closing not be allowed to take place. The buyer and seller's attorneys would be held accountable for the situation, so they would resolve in one of several ways:

Holdback significant funds from seller proceeds in escrow until they vacate per terms of an addendum which everybody signs at closing. I've seen as much as $20K held for back for such matters as this. Clearly spelled out terms of time and cost per day that they exceed which gets deducted from funds in escrow. Conditions of property to be unchanged. Sellers to take out a renter's insurance policy with max liability.

It's all well and good when that warm and fuzzy feeling is in the closing room, but people can be real nutty, and that's why contracts and agreements, (and a fairly painful amount of money held in escrow) exist. to keep people true to their word.

Sorry for your troubles. Valuable lesson learned in your real estate investing career. You know one thing....you'll never make that mistake again.
0 votes Thank Flag Link Tue Aug 27, 2013
Yes you need an attorney. However since you say you will rent the property, you might want to ask the attorney to attempt to negotiate a formal lease agreement with your hold-over Sellers, "before" proceeding to an eviction. If this works, you would have killed two birds with one stone. They don't want to move - and you want a tenant who pays rent.
0 votes Thank Flag Link Tue Aug 27, 2013
Sean,

You need to treat the sellers as what they are. Tenants unwilling to vacate when their contract says so. Contact a real estate attorney ASAP.

Most of these things could have been avoided if a proper lease back contract had been done. Stipulation as to what happens if they do not vacate on time, 2 months security deposit, etc.
From your responses, I may deduct that that was not the case.
Get a lawyer, your agent at this time is a bit late.
0 votes Thank Flag Link Tue Aug 27, 2013
Thank you all for your help. The problem is that the seller is not in need of the $1,000. The sellers (both retired) does not want to move until they purchase a house in San Diego. My agent even offered one of her properties for the couple to move into (free of charge) while they continue to search for a retire home. I understand that at their age moving from one place to another could be tough. But the fact that I'm facing a high possibility of losing my tenants for the year and that it would be extremely hard to find other suitable tenants, I think my only option is to take legal actions against them.
0 votes Thank Flag Link Tue Aug 27, 2013
This is why it is so important that the home be vacant upon close of escrow whenever possible. However if they seller is to remain in possession, there are forms that the Realtors should have used. The CAR form that should be used are either SIP Form for short term or RLAS for more then 30 days. Either way, all these forms due is spell out the legal to help prevent law suits. You need an Attorney and hopefully your Realtor helped protect you.
As the others have answered as well, In my opinion, it is always best if you can offer them a cash for keys relocation assistance so they leave by a specified date, subject to the property being left in broom swept clean condition and in the same condition as when first viewed along with any agreed upon repairs completed.
Good Luck
0 votes Thank Flag Link Tue Aug 27, 2013
Sean,

Just like all the other realtors wrote: get a real estate lawyer involved, and start eviction process.
Check you Closing paperwork. It will tell you how much money the sellers made on the sale. This way you'll know what you got to go after.

Did you do a leaseback contract with the sellers? Did you agent advise you to get a security deposit, just like any other rental?
0 votes Thank Flag Link Tue Aug 27, 2013
You need to start eviction proceeding immediately and yes, the seller can be held liable for damages due to the lease forfiture. contact an eviction attorney immediately and get the process started. it could take up to 6 months to get the seller out...and hopefully they wont file bankruptcy and they will just leave quickly. i hope they do not do damage to your property.

Offer them solutions, maybe a cash incentive to leave. i nope this was not a short sale, this can invalidate it with the bank.

Good luck!
0 votes Thank Flag Link Tue Aug 27, 2013
It was a regular sale. The seller claims that they have submitted a few offers in San Diego but there is no way for them to close the deal and move out within the next 4 days.
0 votes Thank Flag Link Tue Aug 27, 2013
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