Seller Stuck Buyer w Filthy, Damaged Unit at Close. Small Claims?

Question

Is a seller obligated to turn over a unit that is clean and in good repair at close? Seller took a tenants' security deposit as last month's rent just before close and stuck me, the buyer, with a filthy, damaged unit. Do I have a solid small claims case for cleanup and repairs due to tenant damage?

Just bought second multi-family, a 4-unit. One unit become vacant two weeks before close. Stopped by day before close, saw an old tire and a piece of junk by the front porch and a bunch of broken blinds and got worried, as seller had been lax regarding everything to date. Was assured by seller thru our agents that she had personally cleaned the unit.

At close was given a key that did not work for the unit. Had to break in, which wasn't a big deal since there were already small panes of glass broke in the door I guess, though it was a frustrating way to start things off with the new purchase. Go in, and place was absolutely, completely filthy (an earwig in the freezer, every inch of the fridge covered in gunk, toilet had not been scrubbed, cat hair everywhere, many surfaces covered in a thick layer of dust and dirt). And damage one would normally withhold some or all of security deposit for (several substantial holes in the plaster from doorknobs or fists, some woodwork in the kitchen completely shredded by the tenants' three cats, among other things).

Buyer's case:

that seller has general duty to hand over a unit that is clean and in good repair if a tenant vacate before close

that seller led buyer to believe such a unit would be handed over, insofar as she presented to buyer a strict lease that required tenant to either clean or repair unit upon vacating or have their security deposit withheld

Seller's case:

that apartment was cleaned me personally and seller is not required to do deep cleaning before close

that buyer has no right to compensation for any repairs, as they viewed the apartment [my counter to this would be, that yes, I viewed the apartment, but when I viewed the apartment the tenant was bound by the strict lease and seller was hold the security deposit to cover tenant-related damage]

This is in Ohio. A small apartment in a high-income tract neighborhood is at issue.

I have video, pictures, and a log of hours spent on cleaning and individual repairs.

Potential damages might include cleaning at $35 (figure established in her own leases for vacuuming), repairs at $45, and 2-3 weeks lost rent.

Have any buyers faced a similar situation?

Have any agents been involved in such a transaction? This might be a little different since it involves a tenant lease and security deposit that was taken a rent, to detriment of the buyer. But anything you might know about duties of seller at close regarding cleaning and repairs will be appreciated.

Does anyone know of any legal precedents that speak to the situation? Damages won't be worth hiring a lawyer for, so finding a precedent on thru Biggerpockets would be huge.

Thank you for all your help! The podcast and especially these forums have been immensely valuable in starting into real estate investing.

Russell Brazil · Answer

This is what the final walkthrough is for. You would have had thr option to not close or force them into some sort of comprnsation outside of closing. Now that you have closed your leverage has disappeared.

Corby Goade · Answer

Even if you could make a case, sounds like way more trouble than it's worth. I'd hire a professional cleaning company for a few hundred bucks and chalk it up to an education. You'll be carrying around way more than $500 worth of stress if you sue, not worth the energy.

John Smith · Answer

Thanks to all so far. Wondering if anyone knows whether Ohio operates under a broom clean standard or not?

To clarify, its unfair to suggest I was expecting to be handed a unit ready to rent. I was expecting it to meet some basic standard and am asking whether I can pursue seller in small claims. The unit was not seller occupied or vacant, it was occupied and I was to receive a tenant under lease and the tenant's security deposit until 4 days before close.

I understand why the seller took the tenants' security as rent and I understand why she left the place filthy and did not repair any of the tenant damage. I don't understand why I shouldn't make a quick claim in small claims for what it took to get the unit up to broom clean standard and so on.  Thanks!

Thomas S. · Answer

The issues you list are typical and insignificant. Very inexpensive to rectify. Normal issues in my opinion.

Your expectations and standards are far too high, it's a rental property.

Definatly not the sellers problem.

Charlie MacPherson · Answer

@John Smith The unit has to be turned over in whatever condition is specified in the P&S.  In most cases the standard is "broom clean", but if you're buying a wreck that was occupied by a hoarder, it would most likely specify that "the buyer is responsible for disposing of building contents and cleaning".

As @Russell Brazil pointed out, this is why we do a final walkthrough as close to closing as possible.  We look to be sure that the building - inside and out - is in the same condition in which to was shown.

If there is new damage, or if a rental unit that was to be delivered occupied is now vacant - or vice versa - we do a "holdback" of funds at closing sufficient to remedy the situation.

In the case of a tenant who won't leave, the holdback around here can be $10K to cover the eviction process, plus whatever damages a disgruntled tenant may inflict on the way out the door.

Seller Stuck Buyer w Filthy, Damaged Unit at Close. Small Claims?

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