The tenant that is currently in one of the apartments of a duplex we are purchasing that pays significantly less than FMV rent is actually in lease for another 4 months longer than we were advised. Originally we were accepting the fact that we would have taken less than FMV with the anticipation of raising rent when the lease was up. Now that we have found out that we were misled and having to take another 4 month hit, we are getting weary of what's to come. By no means does this break our banks, but is there a reason for concern?
@Tyler Z., where are you in the purchase process and how did you find this out?
You should have asked for estoppels in your sales contract to find out in writing exactly what the situation with the tenant(s) are. If they are different than you expected you should have the right to renegotiate or back out of the agreement.
I would think a modest renegotiation would be in order. A few months of under market rent shouldn't make a good deal look bad so even if the seller won't negotiate its likely still a deal to close on.
@Kevin Sobilo, we are in the attorney review/inspection, we asked for a copy of the current lease to confirm dates and dollars.
Im unfamiliar with estoppels but it see now it would be exactly what we wanted. We originally got the information in the listing of the duplex. We considered asking the difference of the extra few months as a credit in closing costs. I'd be surprised if they canceled the sale over 2-3k.