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Updated almost 7 years ago, 03/16/2018
Loan contingent on tenant's right to purchase waived
Hi BP
Today is supposed to be my closing date on my first investment property and it has been quite the experience up to this point! And of course, some last minute developments came up just the day before closing. Yesterday my lender communicated that in order to get the final conditions cleared for underwriting each of the preexisting tenants (3 in a fourplex in FL) must sign a letter stating "I formally waive the rights to purchase the property I currently lease at...". The reasoning behind this I believe is that the lender feels threatened my the tenant's lease for not exclusively saying they do not have the right to purchase. To be honest, this is all a bit over my head with all the legal technicalities, but I'm just concerned the lender is trying to think of a ruse to get out of underwriting this purchase by making the purchase contingent on tenants who may not have a clue the property they live in is being sold.
Have you seen such a requirement before? If so, how did it go and what happens if one tenant refuses to sign?
Yanier