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Updated almost 4 years ago,
Potential 'Squatter' with property that can't be moved
We have only owned duplexes up until now. We are in the process of buying a large commercial building that we plan to section into 3 units and rent 1 unit to our s-corp contracting business. The other 2 units will be leased. We had the option of 'taking' the dying ceramic business, but declined. The owner warned us that the 2 giant kilns were placed in the building by crane 60 years ago and could only be removed by cutting apart so if someone bought the business they could not take the kilns.
Now,10 days prior to closing, he has informed us that he sold the ceramics business to someone including the kilns and the thousands of molds etc that are occupying nearly all of the 12,000 sq feet and that the buyer would like to occupy 1 of the units to include the area with the kilns. This was presented to us a week ago with some questions as to how much rent would be for the space and the kilns etc. We said we would consider it, but had concerns about insuring the old kilns and that the current occupied space would need to be reduced to the approximately 1/3 of the building that they could afford. Now he said he sold him everything including the kilns and warned us to not be too lenient with the potential tenant on timeframes, because he "takes his time " and is currently not responding to phone calls or condensing any of the molds and stuff that is spread out everywhere. The current owner now says he can't move the stuff because someone else owns it.
My realtor advised that he made moving the kilns his problem now, or I could lease the property to the buyer but I can't do background checks etc on the tenant until I own the property. I'm starting to be concerned that I am buying a building with potentially what amounts to a mega squatter with kilns that cannot be moved.
I guess it's possible that he has a better offer from the business buyer and he is trying to scare us out of the deal, but what are my options here? I'm not liking the risk of the potential non-performing tenant. If we just say no, the building needs to be empty upon closing, the closing will definitely be delayed further and we need these winter months to make the changes we need to occupy, carry out city requirements, etc. before our summer contracting business ramps up.