Investor · Shibuya Ku, Tōkyō-to · Member since 2015 · 90 posts · 36 votes
Quick question regarding normal practice surrounding rents when a tenanted investment property sale is finalized mid-month. I assumed (this has always been the case for me in the past) that when buying a property mid-month that the buyer would receive rent in the pro-rated amount for the number of days remaining in the month of purchase after purchase date. However I recently closed a deal on the 12th of a month and the rents weren't included in the closing. I asked my agent and they said they'd follow up, then came back to me reporting that the previous owner doesn't feel she has to pay this now. Not really sure what my options here are.
Was this a miss by me? Or by my agent and I should have caught it earlier? Curious what convention is and what kind of rights I have to claim my money. It's just under $2000 so not the end of the world, but for someone like myself where that represents a full months living expenses I don't want to give it up when it's something I should he due.
It has been my understanding that you get pro-rated rents, hence why some try to close within the first week of the month and use the pro-rated rents to cover closing costs. I would assume that it would have been in the purchase contract somewhere. If it is, I think it's a closed case and they owe you some money.
Quick question regarding normal practice surrounding rents when a tenanted investment property sale is finalized mid-month. I assumed (this has always been the case for me in the past) that when buying a property mid-month that the buyer would receive rent in the pro-rated amount for the number of days remaining in the month of purchase after purchase date. However I recently closed a deal on the 12th of a month and the rents weren't included in the closing. I asked my agent and they said they'd follow up, then came back to me reporting that the previous owner doesn't feel she has to pay this now. Not really sure what my options here are.
Was this a miss by me? Or by my agent and I should have caught it earlier? Curious what convention is and what kind of rights I have to claim my money. It's just under $2000 so not the end of the world, but for someone like myself where that represents a full months living expenses I don't want to give it up when it's something I should he due.
Thanks all in advance!
Hi Bill-
Excellent question, we deal with closings in various times of the months, so this is something I am very proficient in. You as the investor are absolutely entitled to the pro-rated rent amount based on the closing date that you assume ownership of the property. As you are the new owner of the property you are entitled to all the wonderful perks that come with a Turnkey property, hence they cash flow from day 1, as soon as you close you should have a payment scheduled your way. You own the home and have taken possession of the lease, so you are now entitled to any money collected for that period, in this case it sounds like it would be pro-rated to you.