Found a house we like, contacted a real estate agent to act as buyer's agent for me. Agreed to a price, signed a contract.Part of the home has renters. Supposedly it's a month-to-month rental agreement, and the renters will be moved out by closing, along with the current owner. I think a written lease would convey, and I'd be bound by any terms in it, so I asked my agent to get, in writing, assurance that no written lease exists. My agent says she and her broker don't feel this is necessary, since I can do a final walk through the day before closing and see if the renter has moved all of his stuff out or not. I asked her to answer these questions before moving forward:
1) Is it true that any written rental lease will convey with the property?
2) Is it true that as the new owner, I'm bound by any and all terms and clauses in this lease?
3) Do we even know if there is a written lease?
She has so far refused to answer these questions. She finally typed up a single sentence addendum that says, "Owner and seller agree that renter will move out before closing," , and continues to insist that her broker says, "all of our bases are covered." I told her this single sentence thing doesn't address the possible existence of a lease, and to cancel the inspection, I'm not moving forward at all until this is nailed down in writing.
Am I wrong?
Yeah, I think you're being Way to concerned about this....the property is either delivered vacant and broom clean, or you don't close.
What if there is a year long lease that stipulates that if the tenent has to move before the lease is up, they get $5,000 or something, as soon as I close, I owe that, right? There can be any number of terms and clauses in a lease, you think I'm supposed to go all the way to closing and feel protected just because it appears that all the guy's stuff has been moved? You don't think it's a concern that my agent refuses to find out if a written lease even exists? What are you people smoking?
I'm not an attorney but the answer to questions 1 & 2 are "yes". I don't see why your agent wouldn't simply answer those questions for you. With that said, I agree with @Wayne Brooks . You're way too concerned about this. I understand your concern, but even with that... The one-liner mentioned above should be sufficient. There are millions of "what ifs" that you could concoct in your mind. For instance... What if you got your statement in writing that no lease exists but then the day before closing, they signed a new lease for $1 a month...
Again, there's a million things that you could be worried about. But if you sit around and think about all of that, you'll never buy property.
No, you wouldn’t owe that.
If it's vacant at closing, and you change the locks the day you get the keys (which you should always do regardless), then you're fine.
To the extent that there are obligations that transfer with the property, this is why we have title insurance. I say that as someone who has in fact filed a title insurance claim over stupid stuff the previous owners did. It's also possible that 10 owners ago in the 1800s someone granted cattle grazing rights to anyone who owns more than 10 shares of General Electric...
The existence of a lease with financial ramifications to the buyer would have to be disclosed by the seller. So your issue of "what if...." wouldn't hold water in the very unlikely event it happened. Failure to disclose the lease would then fall back to the seller and the seller would be liable for that $5000.
So a contract indicating that the property will be delivered vacant is just fine. You are WAAAAYYYY overthinking this.
You could add a clause in the agreement that $x will be held in escrow and paid to buyer if the property isn't handed over vacant. We put one of these in place and the seller hadn't vacated upon closing (I'm not sure why we closed without knowing they were out...this was about 11 years ago). We got the $$, but it wasn't enough to cover all of the mess that the sellers' left at the house. 7 dumpsters later.
Im with @Wayne Brooks ...you are putting way too much thought into this. If the property is vacant at the final walk through you are good to go. Nothing more needs to be addressed other than property delivered vacant.