Under contract and seller is signing a new lease

10 Replies

Hello BP community! We just got our first deal under contract in Pierce county, WA and my broker asking the selling agent for all of the documentation in our P&S contract. After a vague response, we learned that the seller just signed a new lease and is planning to sign another new lease on the 2nd unit AFTER we have it under contract. Our contract doesnt allow the seller that right. What do we do?

Also, it would appear the tenant in the second unit has no lease at all. If that is true, how do we get them out? Do we make it a condition of the P&S that they have to be out before we close?

Thank you for the input!

I would bring this up to him and first just ask him not to.

I would check local laws on the other one without a lease. You’ll probably be able to give them a 30 day notice to move out.

Does your contract Disallow this?
Sellers will be hesitant to vacate an apartment Incase you can’t close.....if it’s not in your contract, not likely.

@Ryan Judah

Check what the lease says about "sale of the property" it may give tenants a certain time limit (30-90days usually) to vacate the premise which may work in your favor. 

Wayne, yes, the contract states that the seller must operate the property the same way from beginning to end. They are prohibited from place Ong a new tenant, signing an extension, etc.

Put them on notice then.

If your contract explicitly states they can't rent out a unit, then let them know that their actions would constitute a breach of contract and that you would have the right to declare the whole contract void, or even to seek damages for breach of contract. Not following a contract is serious business, and when the seller does it, it gives you a lot to leverage; to escape something you don't want part of, or to negotiate better terms. 

Crisi averted on the 2nd unit lease. Thank you all for the advice. 

@Ryan Judah If your contract states that one or more units are to be delivered vacant and they are not vacant at closing, your attorney or title company should require a hold back of funds paid to the seller.

The amount should be enough to cover an eviction and whatever other fees (moving, storage, legal, locksmith, unpaid utilities, etc) you would encounter due to the seller's breach of contract.  

Great information. Thanks, Charlie. 

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