Closing on multi unit- trouble tenant not moving out

[Eli Rods]

Hi Fellow BPers,

I need some advice. I have a closing for a commercial multi unit in Delaware and 1 of the tenants was given notice of lease termination. This guy was not paying the increased rent amount set by seller and only the old rent amount. I did notice this during my diligence and his arrears are in the $6k range. I did make sure to notify them, months before closing date, that I did not want this tenant and closing would be contingent upon him being evicted. I have a week till closing and the latest update is that he has not moved out despite receiving notice from them 60 days in advance. I have even suggested that the seller buy him out to avoid court and delay closing but no response to that.

Correct me if Im mistaken , My stance is to close and not make this a huge issue. If we are to close in a week, my concerns are:

- I need to secure the potential loss of rent (he has not paid this month's so far) from the seller till he is evicted by the courts. I am told this takes process takes 30-45 days to by courts and sheriff to evict him physically. I am thinking escrow this by the seller for 2 months rent.

- We did not have an opportunity to inspect that particular apartment due to tenant's refusal (it is a 1 bedroom unit) and am worried about him damaging the place once he leaves. I do not feel the one month rent deposit will be sufficient and would like to be protected in this potential event. I am thinking of having seller escrow this too- would 1 month suffice or 2 months rent?

Am I right to take the escrow route? What do you folks suggest?

Appreciate your help.

Thanks.

.

[Jeremy G.]

I just purchased a multifamily property with the same kind of situation, only difference is it wasnt commercial and the tenant wasn't paying any rent. it was a 6 month process to finally get the guy out, and it did end up having to go to court, multiple times. The guy would not accept cash to leave, he would not accept help finding another place, he just wanted to be a royal loser and make everyone miserable, in the end it took 2 different court orders, 2 different sherriffs, 2 different times to physically remove him from the property, the first time he was removed, he filed an appeal with the supreme court claiming he was a military veteran and in hardship, all false.

 in the end, i lost about $6,000, by having to extend the close date multiple times, and having to keep extending my rate lock, as well as losing the money from the potential rents I was expecting and having to pay bills in a property I was no longer supposed to be in as well. the sellers constantly tried to get me to close, but the sale was contigent on that apartment being vacant so my daughter and I could live in it. they offered escrow to cover the rent he wasnt paying until he moves out, but I needed to move in and it took 3 more months to get him out after they offered the escrow. either way It wouldn't have worked. I should have walked away from the deal after the first 2 months. But I had already been searching for a property for almost a year and was desperate. luckily its a cash flowing property and rents are crazy in the area right now.

But having just gone through the same kind of issue, i HIGHLY recommend you do not close until the loser is absolutely positively gone period it could be months before the courts finally remove him then he could try some shady underhanded crap to appeal the eviction. Im a newb but I would never go through this kind of deal ever again as long as I live.