I have a SFH property under contract in Cleveland OH and hope to close in the next 3 weeks. Seller had promised to evict the tenant and told me a court has ruled for the tenant to be evicted. My realtor amended the purchase agreement and put a clause in that states the property will be delivered vacant and seller agreed. Now seller is saying the tenant made a payment and therefore cannot initiate the eviction. The lease agreement is outdated but still seller is saying he cannot evict the tenant. What do I do now, since I don't want to deal with a tenant who obviously has financial issues and cannot make rent payments on time.
@Frank Agyeman-Duah What did your realtor say? Sounds to me like you have the option to renegotiate based on the additional risk or you have the option to walk away from the contract without penalty.
My realtor said the seller is unable to evict the tenant and seller is ready for me to sign a release to terminate the contract. But my problem is I have already paid for home inspection and appraisal. Also the numbers are good but the only problem is the eviction issue.
@Frank Agyeman-Duah time to walk; closing on that property would be a disaster. don't sign any closing docs.
@Frank Agyeman-Duah The appraisal and inspections are sunk costs. No different than if the seller had ultimately been unable to deliver a marketable title or if you found something in the inspection that had caused you to want to walk.
If the lease agreement is outdated and the tenant is month to month, you should be able to give them notice and ultimately evict if they choose not to leave. Obviously check your local laws etc as well as whatever the latest covid moratoriums say, but evicting due to non-payment and evicting due to them refusing to leave when the lease ends are two different beasts.
That being said, rather than cancel have you discussed renegotiating with your realtor instead of walking? You may have a shot at a lower price considering the circumstances.
I just asked my realtor to renegotiate the price.
@Frank Agyeman-Duah You are not the one at fault as your contract says that you are to be given free and clear title without a tenant so if the seller cna not deliver then THEY are in default not you. I agree with @Dave Ryan and @Bjorn Ahlblad but I do not think your costs are unrecoverable. You may have to put pressure on the seller but you do not have to release the seller from his obligation and can be a real pain in his process until he pays you for your costs.
Don't accept the tenant in the home because that is written into your deal. So offer to extend the contract as long as it is necessary for the seller to make good on their end of the bargain, or for the fee of your costs be willing to terminate the contract. The seller needs to make good on your costs at a minimum, it wont cover your wasted time but its better than being out time AND money!!!