At closing, no deposit!

[Mark Burlison]

Hi All, on 1/31 I closed on my 4 unit. Going to close I noticed one lease had a signed addendum by tenant and landlord. It stated that she had given there deposit back to them. My attorney went after the issue very strongly....telling the seller we expected the deposit issue to be resolved at closing. Our attorney later recanted her position after conferring with a partner saying we can’t force them to produce a deposit unless the tenant produces it. I wasn’t going to walk from the deal for 800.00 nor get into a contract dispute. But I still think we should have NOT backed down! My question is what is the legal answer?  Did I receive the right legal advice? Thanks!  

[Mitch Messer]

Hi @Mark Burlison. I'm no attorney, but these kinds of issues are exactly what the estoppel process is supposed to address long before you arrive at the closing table.

Without knowing all the specifics, it does appear this could have been handled better by your attorney. Once you get to the closing, it's pretty much a coin toss as to what happens.

Next time, you'll know to get signed estoppel certificates for each tenant as part of your due diligence.

Welcome to the club: We all live and learn!