***Security deposit issue - closing in 3 hours - SOS***
I'm set to close on a triplex in 3 hours and just got an email forwarded from my agent....a conversation between the seller and his agent. Here's the issue:
Two out of the three units don't have security deposits. The leases state all 3 units have them, and has all the usual language about how they can be used, when they are returned, etc. All units are still occupied. The lease states the security deposit may not be used by the tenant as rent during the term of the lease.
Oh - and I almost forgot - one unit is in arrears and has not paid this months' rent. So I may be walking into an eviction from the start.
Advice? Thoughts?
Most Popular Reply
@Justin Hayman I am not sure if you closed already... I hope not!
If the leases state there are security deposits and no one said anything to the contrary, then you had better get security deposits. Otherwise, demand signed estoppel certificates from the tenants that indicate how much security deposit there is. The eviction piece could be ugly as well. One strategy is to request the seller put money in escrow with your attorney in case you have to evict.
Remember, you are at the point of strongest leverage right now in the transaction. You want to close.... but so do they! Push hard, and don't be afraid to offend. You will be inheriting their mess. Unless you are getting a great deal, your negotiations now could be a huge part of your Y1 profitability.