Possible to close on a property with active eviction?

[Matthew Lindsey]

Hi,

I know this is not ideal at all but if the sellers of a property with a tenant in place has filed an eviction on the tenant within a couple days of closing on a property does the eviction stay in place, or is it null and void once the closing takes place? Eviction for non payment of rent.

I’m supposed to close on a property this week and the sellers just decided to file an eviction on the tenant. The tenant had already been given the 60 day notice to vacate then the sellers just decided to file the eviction on Friday. I know the ideal thing is to acquire the property vacant but that wasn’t an option here if I wanted to buy the property. I’m just trying to see if eviction stays in place and is still legal after closing if I amended the contract to state the sellers must follow through with it. Also I haven’t had to evict anyone yet but do the owners have the option to not accept rent payment from the tenant since they are late in order to have them removed, or do they have to accept rent and keep tenant in for 60 days?

Thanks,

Matt

[Bjorn Ahlblad]

Hire a lawyer from a local REI Association, that's all they do. As the new owner/LL you have to start the eviction yourself. Or close after the eviction is over. All the best!

[Greg H.]

Quote from @Matthew Lindsey:

Hi,

I know this is not ideal at all but if the sellers of a property with a tenant in place has filed an eviction on the tenant within a couple days of closing on a property does the eviction stay in place, or is it null and void once the closing takes place? Eviction for non payment of rent.

I’m supposed to close on a property this week and the sellers just decided to file an eviction on the tenant. The tenant had already been given the 60 day notice to vacate then the sellers just decided to file the eviction on Friday. I know the ideal thing is to acquire the property vacant but that wasn’t an option here if I wanted to buy the property. I’m just trying to see if eviction stays in place and is still legal after closing if I amended the contract to state the sellers must follow through with it. Also I haven’t had to evict anyone yet but do the owners have the option to not accept rent payment from the tenant since they are late in order to have them removed, or do they have to accept rent and keep tenant in for 60 days?

Thanks,

Matt

Absolutely you should delay closing until the eviction is resolved and the property can be delivered to you vacant and in the same condition as you contracted for. There are so many pitfalls to this situation and the brunt of them will be negative to you. 

[Trent B Paul]

Hey Matthew, 

@Matthew Lindsey I struggle to think of any situation where you would benefit from closing prior to the eviction being finalized. However,I can think of 100 negative scenarios playing out. I'm not sure of the specifics of the agreement you had with the seller, but if the contract explicitly mentioned them conveying the property either fully vacated or fully occupied, then they are in breach of that agreement and that may be the leverage you need to extend closing or terminate and submit a new offer stipulating that the eviction be completed prior to closing. 

If there are any additional mitigating circumstances, feel free to let me know and we can chat more about your options.

Also, in the state of Georgia, once the eviction notice is received, the tenant has 7 days to pay the full outstanding balance and notify the court that this has taken place. Afterwards, the courts take over. 

[Matthew Lindsey]

Thanks @Bjorn Ahlblad and @Greg H.

@Trent B Paul- Thank you as well. Yes, I can see a lot of negatives about the situation as well. I have to be careful as to how I handle the situation as to not lose the deal(there are backup offers). It was a deal good enough as to where I didn't mind acquiring the tenant since they were already served the 60 day notice. The sellers are not familiar at all with being landlords. I'm not sure what made them up and decide to file an eviction on this tenant at the last minute. I assume they were afraid they were going to have to pay his pro-rated rent for the month at closing. I'm hoping we can just extend the closing until after the unit is vacant, which they believe it will be soon. Can this be done with a simple amendment? Also, do you know if the sellers have to accept payment if they are more than one month late, or can they have the tenant removed?   

[Bjorn Ahlblad]

If the LL accepts ANY money after the eviction is started. That is the end of the process and it goes right back to the beginning! Unless the sellers have an eviction attorney taking care of matters there is a very good chance it won't succeed. The sellers cannot complete the eviction after the sale has taken place and a new LL cannot initiate the process prior to closing. All the best!

[Josh F.]

Hey Matt.  To answer your actual question, there are docs the seller can sign so that you become a party in the active eviction and don't need to start the process over.  Chat with the attorney handling the eviction for info on how to do that.  (Whether it is wise or not to close with an active eviction, depends on the overall deal terms and if you'll lose the deal, so I'll leave that up to your analysis.)

[Trent B Paul]

Quote from @Matthew Lindsey:

Thanks @Bjorn Ahlblad and @Greg H.

@Trent B Paul- Thank you as well. Yes, I can see a lot of negatives about the situation as well. I have to be careful as to how I handle the situation as to not lose the deal(there are backup offers). It was a deal good enough as to where I didn't mind acquiring the tenant since they were already served the 60 day notice. The sellers are not familiar at all with being landlords. I'm not sure what made them up and decide to file an eviction on this tenant at the last minute. I assume they were afraid they were going to have to pay his pro-rated rent for the month at closing. I'm hoping we can just extend the closing until after the unit is vacant, which they believe it will be soon. Can this be done with a simple amendment? Also, do you know if the sellers have to accept payment if they are more than one month late, or can they have the tenant removed?   

 I'm not sure if there is an agent involved with this transaction, but there is a form called "AMENDMENT TO CHANGE CLOSING/POSSESSION DATE" This form will provide you the most protection if signed by both parties. At this point, it may be wise to speak with an eviction attorney or more specifically the attorney that is handling this eviction to ensure anything you decide to do has limited liability falling back on you. 

Best of luck!

[Chris Seveney]

Quote from @Matthew Lindsey:

Hi,

I know this is not ideal at all but if the sellers of a property with a tenant in place has filed an eviction on the tenant within a couple days of closing on a property does the eviction stay in place, or is it null and void once the closing takes place? Eviction for non payment of rent.

I’m supposed to close on a property this week and the sellers just decided to file an eviction on the tenant. The tenant had already been given the 60 day notice to vacate then the sellers just decided to file the eviction on Friday. I know the ideal thing is to acquire the property vacant but that wasn’t an option here if I wanted to buy the property. I’m just trying to see if eviction stays in place and is still legal after closing if I amended the contract to state the sellers must follow through with it. Also I haven’t had to evict anyone yet but do the owners have the option to not accept rent payment from the tenant since they are late in order to have them removed, or do they have to accept rent and keep tenant in for 60 days?

Thanks,

Matt

 My recommendation would be to delay the closing as you have no idea what that property is going to look like the day you close. What if there is $10k-$20k in damages to the property and you close? That is a very big pill to swallow and not something I would want to be on the hook for.

Also what if they file bankruptcy and get protection, you are stuck then with most likely not collecting rent for months and chances of collecting it in a judgment are not great.

As others mentioned, there are many reasons, but best to wait.