Lease disclosure from seller was not most current lease

[Dar Fornelli]

Earlier this week we distributed rent increase notices to tenants at a property we purchased a couple of months ago here in Kansas City. The leases we were provided by the seller had all expired and were now on month to month agreements. We were shocked to hear from several of our tenants that the leases we were given were not the most recent copy. 

After making some calls to understand who failed to disclose the correct lease agreements, the property manager informed us that she had signed new lease agreements with several tenants after we put the property under contract. One of the leases signed in February of this year is valid through June 2019. The property manager said that she typically does not consult the Owner when leasing the property, and had never disclosed these new leases to the previous Owner or listing agent. 

What should we do now? The current rents are drastically below market, and our financials were based on upping rents to market in the coming months.