I waited for 6 months on a short sale approval,finally got it just in time for the tax credit. then seller moves a tenant in and is under charging at

Asked by Mindy, Oldsmar, FL Sat May 15, 2010

$650 mo to mo on a house that he offered to rent for 1200/mo plus dep on the mls listing. I'm a couple weeks from being ready to close. The tenants were told that after we close they have 30 days by the agent or seller(?) I'm livid! It was vacant until our contract was approved by the bank. I've already paid dep,insp,pest,appr. What can I do and what could happen? My agent says not to worry but I can't help not to. I have a suspision that the tenants are friends with the seller, who I'm pretty sure is not supposed to be gaining anything from the home as far as I know. I smell a rat and I'm not sure who to trust at this point. I need to know what the law is on this matter. Is there a chance I'd have to evict to remove them? I'm told worse case scenario I would give them 2wks notice if they can prove it and if they don't vacate I get the sherrif to come remove them?? The sellers agent assures us that they will vacate and the seller will repair anything damaged but my gut disagrees.

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Don Tepper’s answer
Don Tepper, Agent, Burke, VA
Sat May 15, 2010
I'd be livid, too.

I'm not a lawyer, so this isn't legal advice. For that, consult a lawyer. However . . .

One thing to do: Read your purchase agreement. Does it address the issue of the home being delivered vacant? If so, you may have some basis for action against the seller.

Next, obtain a copy of the lease. You say the tenants were told that they have 30 days (to move) after closing. That may or may not be correct. If the current owner is renting it to them on a month-to-month basis, that's true. But what if the owner signed a 1-year lease with the tenants? Then they may very well have the right to remain there for an entire year.

Beyond that, if the tenants paid a security deposit to the current owner, they will want the security deposit back--from YOU--when they move. That can be handled by having that security deposit transferred to you at closing. Otherwise, you could well be on the hook for that, too.

You may or may not be correct that the tenants are friends with the seller. It could be as simple as--as you suspect--the seller trying to gain some additional money in the interim. He may not care who pays him the $650 (plus the security deposit he has no intention of giving to you). But if he asked for the first month's rent in advance plus a security deposit, that's $1,300 or so more in his pocket.

I suspect your agent is appalled, but his/her motivation is largely the commission. At this point, your agent and the seller's agent just want the sale to close. Now, having said that, I'm not disputing your agent's ethics at all, and I'm sure he/she is doing what's possible to watch out for your interests. Still . . .

As for the seller's agent's assurances that they will vacate and the seller will repair anything damaged--listen to your gut. How would you even enforce that? You couldn't.

And I'm guessing you'll have a pretty significant negative cash flow until you get your "tenants" out of there. Who's going to make that up??

At this point, you definitely need to see a lawyer.

Good luck.
1 vote
John Bennett, Agent, Orlando, FL
Mon May 17, 2010
And Ms. Buck was correct when she said:

"the proeprty belongs to the seller and they can do what they like with it."

read that twice and take it to heart!!

0 votes
John Bennett, Agent, Orlando, FL
Mon May 17, 2010
As regards: " The answer is--the contract, and the law. If you have a valid agreemetn, trust that all parties will abide by it--your only real concern is that the tenants are fully aware of the situation--so make sure they are!"

Having spent many hundreds of thousands of my own money on legal fees, I have a
paid for education of being a litigant.

I will share with you what my Attorney all ways asked me before beginning a suit.

"How much Justice can you afford????"

Now, if the people who now own the property had money, would they have a hardship that is required to complete a short sale????


Thus a judgement against them is not much more than something you can use a wall paper.

So if you sue them ( your cost $5,000 to $25,000) and when what do you get????

You get a judgment you can use to get them out of the home - should not take more than 60 to 90 days-

and you might be awarded damages - but your odds of collection is slim to NONE!

now of course there might be criminal charges however . . .

Mindy, welcome to the world of the short sale. This world has all sorts of land mines and you are finding just a few of them.

on closing day you need to know the house may not have any fixtures left - no sinks, not tubs, no dishwasher, no cabinets NOTHING, windows maybe broken out, doors removed, all walls torn down, holes shot in roof, septic filled with sand

Another rule of life: "if someone tells me not to worry, I become very afraid"

As I said in my first post, LAWYER, get a lawyer, cheaper now rather than later.

0 votes
Loretta Buck…, Agent, Palm Harbor, FL
Mon May 17, 2010
Mindy, the answer here is really pretty simple--until the contracted closing date, the proeprty belongs to the seller and they can do what they like with it. Now, if the closing date comes and the tenants have not vacated, the seller will be in breach of contract and you will have the right to sue for performance of contract.

Personally, I cannot give legal advice as I am not a lawyer, but until the transaction is complete and title has transferred your only recourse is to wait it out and see what happens closer to closing. Do you have a closing date? If not, I would have the sellers sign an addendum stating that they will guarantee the property be vacant or pay all legal costs required to make it so.

Keep in mind, in many short sale situations, the sellers are still occupying the property themselves--what's to guarantee they move out and leave the property in the same condition? The answer is--the contract, and the law. If you have a valid agreemetn, trust that all parties will abide by it--your only real concern is that the tenants are fully aware of the situation--so make sure they are!
0 votes
Pamela Cohn, Agent, Clearwater, FL
Sat May 15, 2010

Agents are not attorneys and as such we can not give legal advise. You should speak with a real estate attorney. Let me ask you a couple of questions to give you a point of reference to start with if you seek legal advice:

1. Is your contract on the FAR or FAR BAR AS IS- both contracts state occupancy goes to the Buyer on the closing date. FAR BAR AS IS is more specific.

a. FAR Contract lines 50-55 #4 Closing Date;Occupancy: ________________________(the closing date you write in) at the time established by the closing agent, by which time the Seller will (a) have removed all personal items and trash from the Property and swept the Property clean and (b) deliver the deed, occupancy and possession along with keys, garage door openers and access codes to Buyer.

b. FAR BAR AS IS: line 76 Occupancy: Seller shall deliver occupancy of Property to Buyer at time of Closing unless otherwise stated here in.

If there is a chance the tennant will be in the property closing day and/or after you may want to speak with a real estate attorney about your options. You may want to discuss an amendment requiring the Seller to put into escrow, at closing, funds to cover your potential liabilities, including mortgage loss while you are unable to move in.

When rental property is sold, any current leases are supposed to be delivered to the Buyer for review prior to closing, rents prorated and credited to Buyer at closing and all security deposits given to the Buyer to put in Buyer's escrow account. Being a "Short Sale" the Seller's Lender may not allow this, since the Seller is not supposed to be receiving any cash from the transaction...this is why you need to speak to an real estate attorney. Ask your agent or thier Broker for some real estate attorney's names.

Good Luck.

Pam Cohn
Broker Associate, GRI, SFR, CDM
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
2539 Countryside Blvd #3 Clearwater, FL 33761
0 votes
John Bennett, Agent, Orlando, FL
Sat May 15, 2010
Two words of advise

Lawyer, Attorney
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sat May 15, 2010
As far as any legal rights and the law, your best source of information is an attorney--protect yourself--do consult with an attorney who specializes in real estate.
0 votes
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