Seller didn't made off with prepaid rents, now what?

[Daniel Bogart]

Hi BP,

A few weeks ago a few partners and I closed on a 10 unit apartment complex. It wasn't until our property manager collected the first month of rent that he had tenants in two units tell him that they had prepaid the next three months of rent to the previous owner (about $6K total). The tenants have documented these transactions, but the seller never disclosed it to us during the closing process. The seller was difficult through the transaction, and refused an estoppel on the grounds that she cared too much about her tenants and didn't want to disturb them. Clearly this was BS and I have zero expectation of the seller politely giving us the prepaid rent.

What's the best way, if any, to recover the funds?

[Aaron K.]

This may be escrow's responsibility as they handle stuff like this a lot of the time, I'd start asking questions there.  If you used a realtor they may be your next stop so you can have a representative to the seller's realtor, worst case you probably end up in small claims court and eat anything over the dollar limit.