Quote:
Originally Posted by Targa Me
I'm looking to buy a house (primary residence).
Currently the property has renters living there. They are to be out by the close of escrow.
Do I need the renters to signs a document stating they will leave the property at the close of escrow or will the Clear Walk Through prior to the close of escrow be sufficient? In other words, after the walk through, if they're not gone, I'm not signing closing documents.
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IF you are
looking to buy, I am assuming there is no contract (yet)? If that's the case, you simply need to make sure the issue is addressed in your offer. If the tenants have a valid lease that extends past your proposed COE date, you will likely be required to honor it for the remainder of the term. As the new owner/landlord, you would be entitled to the pro-rated rent from COE onwards, but would also be the one to deal with eviction if necessary.
If you don't want to deal with any of that, you need to be absolutely certain of two things prior to taking possession: 1. Termination/expiration of all existing leases. 2. Tenant vacation/eviction (to include all of their personal belongings).
So, before even submitting an offer you might request a copy of the existing lease to confirm the dates, and better yet, a copy of a signed/dated notice of “non-renewal” or “intent to vacate” from the tenants to the current owner/landlord. Then, draft up the offer with a COE well past the lease expiration date. If you already have an executed contract in place, you can draft up an addendum addressing the issue. However, if you are not in a position of leverage (outside of your due-diligence period), it may be too late to slip an addendum in. That said, most decent RE contracts will include "occupancy" as one of the conditions of "possession" which occurs upon COE. If that is the case, you will have leverage even if you are past your due-diligence period. Still, it's best to avoid any potential issues from the start.
On an initial offer/contract where occupancy isn't already addressed in detail, you can include something like:
"Purchase is contingent on the property being free and clear of any/all leases and sub-leases, with all tenants having vacated the premises, and any/all personal property removed, no later than 5 days prior to COE". You might throw in a cure-period and/or non-compliance remedy clause as well (to include daily monetary penalties), if not specified already.
As mentioned, I would (personally) never enter into a post-possession or lease-back agreement on a primary residence. It is just asking for trouble IMO. Be sure they are gone before it is yours, and change the locks the same day you get the keys.
Good luck!
Disclaimer:
I am in the RE industry, but not an attorney, and the above is not legal advice, just my opinion. Yadda, yadda, yadda. YMMV.
