Signed contract with contingency that renters will vacate in 90 days.

Updates along the way were renters found another place and have been moving stuff out.

90 days is May 30 and just received word that the renters will not move out now.

I assume our options are to back out or bend to the will of the renters.

Renters are paying half the market rent (that will not even pay the mortgage let alone expenses) and I have a very limited time to rehab the house before putting in new renters.

Any advice?

@Mike Young , if you are trying to solve a problem, the first step is to identify what the problem is.

So, are the tenants refusing to move? Unable to move? Planning to move, but need more time? Possible solutions may vary depending on what the situation is.

For example, maybe they don't have the money to move and need more time. You or the seller might do a "keys for cash" and give them a little something to get them out and close the deal.

If they are refusing to move, maybe the eviction process can be started now and completed after closing to save some time.

Im sure there are more options depending on what the exact situation is.

I agree with Kevin. Isolate the problem so that you can identify the best solution. Normally, we would postpone the closing until the Seller can get the tenant out.  Cash for keys works pretty well too and may be your easiest choice of action. In Southern California, the Courts are very pro tenant and can be quite time consuming.  Talk to the tenant in a helpful manner and hopefully you can negotiate a way to solve the problem. 

If you do cash for keys, do NOT give them the money until after they are out and you've inspected the place.

If they won't leave, push back closing or cancel.  If rent is 50% below market value they probably don't want to move as they realize what a deal they have.

@Mike Young we are having the same problem. Our tenants are supposed to move out at the end May and they told us they aren’t moving out. They aren’t paying market rent. We started telling them in March we would give them money to leave early. We have offered to pay their deposit on a new place. We offered to move their stuff for them. They say they can’t find a place for rent. The truth is they can’t find a place to rent for the price they want. They really just want to stay where they are paying the lower than market value rent. Any advice is appreciated. I’m afraid our only choice is eviction. Are we allowed to evict yet?

@Kevin Sobilo I just posted our similar problem. Please read. Any advice is appreciate.

@Winston Covington what do you do if you have offered cash for keys and even offered to make their stuff for them but they still won’t leave. They say they can’t find another place. There are places for rent in their price range but not in the location they want.

@Theresa Harris what advice do you have to get them to leave if they won’t take cash for keys? Like you said they know what they have and won’t leave. How do I make them? Their lease is up. I can jack up rent but they haven’t signed a new contract.

What are the local laws on notice for rent increase and how much you can increase rent by?  Are they month to month or on a lease?  If they are month to month and there are no caps on increases, then give them notice of the rent increase if they don't want to move.  I would still make this the seller's problem. You can give the seller an incentive (not the tenant) to make sure it is vacant at closing.

Reschedule the closing date. This should be the sellers issue since they own The property. When do these current leases expire? 
In most jurisdictions non-Covid related Evictions are proceeding. Serve them a notice of nonrenewal start the process and move on.

Mike, I missed an important question, are you the seller, or the buyer in this case?

@Mike Young figure out what it will cost to get them out and reduce your offer by that amount. For example, 12 months fair market rent. Even if it takes you six months to get them out and the other 6 months rent is spend on an attorney, it is a win. Basically just tell the seller with the eviction moratorium and slow moving courts, this tenant could be there a long time. Either get them out or accept this concession for us to close.

@Christy Philippoff cash for keys is playing with fire unless you are very experienced. The only way it should be offered is with a fixed amount and firm deadline. You also need to communicate what happens if they refuse. 

"Take this $1500 and be out by May 30th. If you refuse the offer, we will start eviction proceedings. My attorney is good. The eviction will show up on your record and make it hard to rent in the future. On top of that we will get a judgement for money owed. I will have a collection agency go after your bank account and get a garnishment on your paycheck. I don't  want to go that route. It would be easier if you took the $1500 and saved us all the trouble, but if you make me go to court, I will not stop until you have an eviction on your record and pay me the $XXXX back rent you owe me."

Usually when people offer cash for keys, it becomes a negotiation and the tenant keeps asking for more. Often the tenant is just stringing the landlord along. They figure they will get a couple more free months and the cash will still be there waiting. Once a landlord backs down from any ultimatum, they lose credibility. They need to know you are serious or they will gouge you for everything you have.

More info...

Renters are staying because they cannot find anything in the area at the rent they are paying. (which is half what it should be) They will never find a rental with the deal they are getting now. 

Contract states that escrow will not close until the renters are out.

If renters are not out by closing date the seller is responsible to pay for relocation of renters.

House is being sold less than market value.

I only have until July 30th to rehab the house and need to do most of it myself.

Normally I would walk away if things didn't work out, but I'm emotionally invested. I have wanted this particular home for years.

The seller has no loan on the property and is out of state. So the seller doesn't lose anything if it doesn't sell.

Can the seller just back out with no consequences? I seem to have no leverage besides just not buying the house.

I don't see how to reply to people other than posting a general reply.

@Joe Splitrock thank you. I’m going to use what you wrote if you don’t mind. It’s stated beautifully. We told them to be out by May 30 and we would give them $500. We told them yesterday they weren’t leaving us any choice but to start eviction proceedings. I love what you wrote. Thank you again.