What have you offered to get homeowner to vacate?

[Maryann L.]

I've run into my first situation where the homeowner is telling me they have NO WHERE TO GO. Interetingly he's had 4 months to prepare for this, but I won't go there at this time. We want to close in two weeks.

I'm thinking first month's rent somewhere. Anyone have any suggestions?

I haven't dealt with this before so I'm not sure what the norm is.

[Scott Hubbard]

Originally posted by smitnlit:

I've run into my first situation where the homeowner is telling me they have NO WHERE TO GO. Interetingly he's had 4 months to prepare for this, but I won't go there at this time. We want to close in two weeks.

I'm thinking first month's rent somewhere. Anyone have any suggestions?

I haven't dealt with this before so I'm not sure what the norm is.

Whoa! Before you give them any money:

1. Does your contract address this situation? Normally this would fall under the settlement or title transfer provisions in the contract. Tell the seller if they do not make arrangements to move prior to the sale, the sale may be cancelled.

2. Are you taking title yourself? If your flipping it, then this could cause problems for your end-buyer. If your seller refuses to leave and you have had this discussion you are obligated to disclose this to the end-buyer prior to closing. If your selling to an investor inform him or her of the situation because they would be in a better legal position to evict. Pay the investor the 1st months rent instead of the seller and the investor can evict instead.

3. Did you promise the seller any financial help? This could be a potential liability for you since the buyer cannot receive an proceeds from the sale. You should carefully review the terms on the approval letter to make sure this will not violate its terms. I would not give them any money unless they are physically moved out of the property and you have changed the locks.

I remember a situation where this happened to me and offered to pay the tenant to move, cash for keys, and I gave them first months rent and they still refused to move. I had to give them 30 + 12 days to evict them.

4. Seek counsel. There may be specific laws which address this situation and unless you follow the law to the letter, you could be taking on potential liability.

There was another investor who was in this situation and helped the tenant secure a place by providing the downpayment. This was an elderly woman with a heart condition and the investor helped pack her up and during the three-day marathon they sold 2/3 of her stuff in a garage and junked a bunch more.

Two months later, he was faced with a civil complaint spurred on by the her children because of lot of the stuff that was sold actually belonged to them. The grounds were an illegal eviction and this ended up costing the investor tens of thousands of dollars because amongst some of the stuff sold were collectibles.

YOU are at risk here, so I would seek advice from a RE attorney before doing anything. As it was explained to us, if that tenant suffers injury or death, God forbid, you could be held responsible.

Good Luck!