Seller and Tenant Backdated Lease Misrepresenting Sale

4 Replies

I made an offer on a 4 family house in Massachusetts that was accepted contingent upon review of the leases. The property was represented to be taking in $1,400.00 per unit. Upon receipt of the leases on 6/21 we were told that one tenant (tenant A) was a tenant at will under the same terms of their expired lease and were month to month at $1,200.00. As they were month to month we were not concerned with their discounted rate and we moved forward to sign the purchase and sales agreement. 

Upon reviewing the p&s we noticed that tenant A's lease term was changed to expire in May 2019. At this point we reached out to the lawyer who provided the front page of a new lease that was not provided to us. The lease had them locked in at $1,200.00 monthly and was clearly backdated to 6/1 (before we were provided the leases). His signature was on the lease dated 6/21, which was the same date they provided us the old lease - we assume to appear that they did not have the new lease upon request.

Terms of the original lease provided to us on 6/21 for month to month leasing terms:

- $1,200.00

- Security deposit given

- No smoking

- Unit cannot be used to run business

- One garage spot

Terms of new lease provided 7/29 backdated to start lease term on 6/1

- $1,200.00

- No security desposit

- Tenant can run business out of unit

- Tenant has been and will continue to smoke in unit (no joke this is essentially how it was worded)

- Tenant has the entire garage (two car garage)

We signed the p&s with the contingency that no leases should be modified and no new leases would be signed unless we vetted the prospective tenant.

We have been reading some forums and are wondering what our options are. We would like to avoid going to court, but are hoping to see some reconciliation for these actions.

- Request that the seller pay for closing fees due to misrepresentation of the monthly income, this being a smoke free property, and the backdating of a lease while not providing it to us for review. 

- Once we close writing a letter to the listing agent's office and putting in a complaint on this issue in hopes that they will provide us with a payment via insurance

We have not closed on the property yet, but are due to close later this month. If you can let me know your thoughts and advice on how we should proceed it would be greatly appreciated!

You have no damages. Choose not to buy the property if you domt like that the tenant is a smoker.

@Kelsey G. Thats absurd ..Refuse to close until an updated lease is signed by all parties that includes the correct terms and regulations you expect in the lease agreement . If he won’t do an addendum to the lease tell him to pound salt and go hunting for a new apartment building . Don’t just chalk it up as a loss and go through with this closing . Who knows what else the seller tried to pull on you

The seller likely stands to lose much more than you do if you walk... make em fix it, but don't think for one second a smoker is going to "stop" smoking no matter what a piece of paper says.

The seller has three options:

1. Return the tenant's lease to the original terms you were provided;

2. Compensate you for the difference; or

3. Terminate the purchase agreement.

Option 1 doesn't cost the Seller anything. The other two options will cost significantly. I would walk away from it unless the owner gave me Option 1.