Undisclosed lease on property sale
Hello good folks of BP,
I have a problem on my recent property sale. It goes like this...
I sold a rented 4-plex in Arizona to a private buyer. I used a property management company to manage this property for about 3 years. At the beginning of escrow, I disclosed the current leases and the escrow closed smoothly. A couple weeks after closing, the buyer came back to me and mentioned that my property management company signed new leases and filled the vacant unit with new tenant during the escrow process (after I signed the contract but before the escrow closes).
The new leases are 1 year long and the new owner is not happy as he cannot raise the rents. Property management said that renewing leases and signing new leases are SOP and they do not need owner's permission or have to notify me in the process. Thus, I was not aware of the new leases at any given point of time during escrow.
As of now, the sale has closed, I got the money and it is on the record. The buyer is threatening to undo the sale or claim for damages as they were not disclosed of the new leases.
Do you guys have any opinion on this case?
Cheers,
Deddy