New rental property with 1 tenant and 2 leases

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New rental property with 1 tenant and 2 leases

Will Mckenzie
Member since 2021 · 3 posts · 0 votes

So I just bought a duplex in south fl with 70 ft of dockage on the water. The tenant has 7 more months on his lease. So I’m renovating the one side and going to rent out the boat slips where I can put 5 boats tied stern too, but he shows me on his lease where the seller and realtor signed a revised lease that he has use of the dock for his boat. In the disclosure they gave me a lease that just said he was renting unit 1 and didn’t mention anything about dock. I’ve seen his lease and it’s signed by realtor and the seller. Would that fall under fraud/ concealment / non disclosure. 
I was looking at bringing in 3k a month in slip rentals now I lose that for the next 7 months

Thanks for the help

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Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
5y

Approach both realtors.  Tell them you never received that lease, it was not disclosed and now you are out $3k for each of 7 months.  Ask them to make you whole.  They have insurance for this...errors and omissions.

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  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    5y

    Approach both realtors.  Tell them you never received that lease, it was not disclosed and now you are out $3k for each of 7 months.  Ask them to make you whole.  They have insurance for this...errors and omissions.

    1Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    5y

    Was the dock usage addressed in the estoppel?

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    1. You should use an estoppel agreement to protect you from things like this.

    2. Contact the selling REALTOR. Explain the lack of disclosure and how much you'll be losing. Ask for compensation for your losses. You can accept the whole amount or negotiate down to 50% of the losses. Whatever floats your boat. Set a deadline for them to respond or you will escalate to their Broker.

    3. If the selling agent refuses to compensate or negotiate with you, put this all in writing and send it to the responsible Broker. Explain it all and tell them you expect to be compensated for the losses. Set a deadline for a response. Be willing to negotiate.

    4. If the Broker doesn't respond, contact the state commission and file a complaint with them. Brokers and Agents can be easily motivated when the state starts looking into their business.

    If none of that works, then suck it up and change it once this lease ends.

    Your offer to purchase should include a requirement that they provide all documentation and agree to sign an estoppel certificate (also called estoppel form or agreement). The estoppel certificate is a form filled out by the tenant and then confirmed by the Landlord. It's supposed to ensure there are no surprises after closing. For example, you buy the place and the tenant could claim the Seller allowed them to paint the walls black or that their security deposit was twice what the Seller claimed. How will you know? An estoppel certificate fixes this problem.

    Some things it may include:
    1. Tenant name, contact information, and address
    2. Occupancy date
    3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate
    4. Are there any modifications to the written lease?
    5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?
    6. Current lease term (expiration date, month-to-month)
    7. Current rent rate
    8. Rent due date
    9. Security deposit amount
    You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

    Here is an example and explanation: https://eforms.com/rental/esto...

    Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    5y

    @Nathan Gesner I see what you did there : ) 

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