I have a rental which the current tenants want to buy. The lease expires June 30th and they want to close June 8th. Their latest buy offer requests that their June rent be forgiven (8 days).
I'm hesitant to "break" the lease agreement but also want to grant this. Their argument against paying the whole month and getting refunded is lack of funds, mainly 20% down payment plus closing costs.
My concern is, if they don't close (no loan approval or appraisal coming under), how do I collect the full rent for June?
Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes
8y
@Olivier Gilles I would MAYBE forgive the rent for June IF I had confidence they were capable of buying AND I needed to sell. If I wasn't in a pinch and under pressure to sell the property, NO. Honestly, if they don't have the money to pay rent I don't have confidence they'll be able to buy.
Canton, OH · Member since 2018 · 118 posts · 63 votes
8y
@Olivier Gilles I would not break the lease, I would add an Addendum to the lease that states that if their purchase goes through and closing is June 8th, you will make the prior lease end as of May 31st; but if the purchase does not go through, the end date remains at June 30. That way you are covered either way, and you aren't breaking the original lease.
Does it really make any difference when the closing date is. Change the closing date to July 1st and continue the lease as indicated to June 30. The sale has been made unnecessarily complicated by closing mid month.....fix it.
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
8y
@Kris F they want credit for the first 8 days too , as i read it. I would just have them pay the rent and rebate on closing or as others have said close at the end of the month. The risk for the seller is they don't close so you don't want to forgive rent upfront.
Investor · Saskatchewan , Saskatchewan · Member since 2017 · 311 posts · 233 votes
8y
Yes you’re right I think. Anyone willing to walk away over 8 days rent isn’t an actual buyer anyway. Most I would do is a gentleman’s agreement for the first 8 days rent once funds fully transfer. Anything above that, take a hike.