Seller hid brother squatting w/o lease and pooping - recourse?

Question

Hi - I just closed on a 45 unit property. Towards the end of the deal the seller would not let my property manager talk to the current resident manager.

The day we closed we learned that the seller’s brother is squatting in a unit without a lease and pooping in a bucket rendering the neighboring unit un-rentable. During inspection the resident manager was told to not disclose this and the brother was not there at the time. Apparently, he’s lived there for years and is a hassle to other tenants too.

Both brokers are upset about the dishonesty in this situation and willing to collaborate as needed. We’re all but certain this was an intentional cover up.

Aside from ensuring the brother is safely transitioned out and housed appropriately what recourse do I have in this situation if any?

Nathan Gesner · Answer

1. The Seller is required by law to disclose any material facts that may impact a Buyer's interest in the property. This would be considered a material fact, so you could sue. If a REALTOR was involved on the Seller's side, you could file a complaint against them but you need evidence they knew about it.

2. You should have inspected. Look at the rent roll for the past year or two. If that unit shows no rent income or lease, you should have asked about it. You should have walked through every unit, especially the empty ones.

I think you should accept responsibility for not reviewing the documentation and the property. I would also question why your Agent didn't stress the importance of this and keep you out of trouble. There may be other major problems you aren't even aware of yet.

Hire an attorney and get the guy out.

Bill B. · Answer

Sounds like a win. Out of 48 units probably the smallest possible problem you could have encountered. It’s either an eviction lawyer or just the cops for a trespass. Depends on the local law. Ask your property manager.

Daniel Lewis · Answer

That's really sad to hear. There's no easy way other than to lawyer up and/or take them to small claims court for fraud.

Steve K. · Answer

Unfortunate. On one hand it seems likely that the seller tried to slip this through. On the other hand, you had the opportunity to get and review the rent rolls, estoppels, etc. during due diligence and inspection. At this stage in the game, I'd get the property stabilized and move on personally. You could possibly sue for failure to disclose material facts, but you'd have to prove that the seller knew about all of this and also that you suffered damages. This wouldn't be a case worth pursuing for me. Not in my area where the onus is mostly on the buyer to conduct their own due diligence (caveat emptor). If anything, I'd bring my issue up with the seller directly and look to come to a settlement outside of court. Good luck, and hope you got a great deal!

Bud Gaffney · Answer

@Nirav Shah Sue immediately.

Daniel Lewis · Answer

Yeah - going tomorrow to assess situation more thoroughly with property manager(we've both been there but not together since closing) and will look at waste/nuisance for eviction vs. public health/medical recourse which is much faster than typical process.

Eliott Elias · Answer

If you can get him out without evicting you should be fine. If the squatter incurred any additional damages I would claim those with the other broker.

Bob Floss II · Answer

@Nirav Shah Some key facts are missing here:

1. The seller's resident manager was present during inspection and told not to disclose. Who from your team was present during the inspection? Why didn't your inspector notify you?

2. Did you do due diligence and review leases and rent history for the property? What did they have on the OM for that unit?

3. Did you receive assignments of lease and attornment letters at closing?

Kim Meredith Hampton · Answer

@Nirav Shah If you don’t want to avoid an attorney for fraud or misrepresentation, I would move forward with an eviction. Not sure what type of landlord/tenant laws you have there, but if you can’t just get him out by basically scaring him or cash for keys, eviction is the best route.

Daniel Lewis · Answer

Thanks - Why the seller's broker? How are they to be accountable?

Seller hid brother squatting w/o lease and pooping - recourse?

Seller hid brother squatting w/o lease and pooping - recourse?

Most Popular Reply

11 Replies