Post Closing - Rent Pro-Rations - HELP!

[Nik S.]

Hi everyone,

I recently closed on a (2) multifamily apt buildings. We closed on the 11th & at that time not all rents were collected. It was agreed upon that after closing, any rents collected after the closing would be adjusted to each party. Considering we closed on the 11th, the previous owner is entitled to 32% and 68% to myself.

At closing, I got a credit of the COLLECTED rents. I wasn't credited the full scheduled rent roll as not all was collected (some tenants pay late etc..) So ultimately I collected roughly 80% of the scheduled rent roll. 

Now here's the tricky part. As the month is closing and we are trying to settle all the post closing pro-rations, me & the previous owner are at a disagreement. This is more principle. (I will edit out all person information but the dollar amounts are all accurate)

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Here is the previous owner's synopsis on pro-rations : (Sorry for all the information but it's important!)

These are the numbers I have as a result of the information below. These are the amounts COLLECTED & UNCOLLECTED

The percentages of rent are as follows:

Jerry-32% - 10 days for August

Nik-68% - 21 days for August

To Nik (CURRENT OWNER)-

$505-1767 #8

$520- 1566 #5

$250- 1588 #8

$1275 x .68 = $867 + ($176 pre paid rent from 1767 #12) = Total of $1,043 due to Nik

To JOHN DOE THE PREVIOUS OWNER:

$200- R Smith

$200- W Jack

$490- J Hab

$90- Kyley D

$305- Lyn H

$415- Harm W

$250- Ra P

$500- Vicky 

$100- Rin Mo

$2550 x .32 = $816 + ($120 for Vic Wi /July Rent) = $936

Uncollected Rents for August-

$65- Ro Smit

$285- Wi Jac

$10- Ai Pi

$5- Vic Wi

$300- Est Mo

$665 x .32 = $213 due to John Doe

Due to John Doe (previous owner) - $936 + $213 = $1,149

Due to Nik (current owner) - $1,043

Difference due to John Doe= $106

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HERE IS MY ANALYSIS ON THE PRO-RATIONS: *(my response I had sent over to the previous owner)

Settlement : Nik is owed $227.00
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Nik's owed total = $1043.00

$505 + John Doe Collected
$520 + John Doe Collected
$250 + John Doe Collected
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= $867 (68%)
+ $88 + $88 = PrePaid Rent Payment ($176)

= $1043.00

John Doe is owed $2550 (see above for figures) x .32 = $816

Vic Wi $120 - is ours on the assumption we could have applied that to Septembers rent. It was OUR choice / efforts to apply it to the BACK RENT owed. John Doe had his right to claim/collect it prior to closing. $120 was his responsibility to collect prior to closing. It was our choice to chase the back rent and apply it to the back rent owed. Why should our efforts be transferred over to the previous owner?

UNCOLLECTED RENTS : John Doe isn't entitled to collect any uncollected rents as there is no guarantees. In theory, if this were the case I would have been prorated the "uncollected rents" at closing. Considering I only got my share of COLLECTED rents, John Doe is only entitled to the portion of rents we have collected for the month of August. Any future collected rents in regards to back rent is ours IF we collect it. What happens if we never collect it?? How are you entitled to collect a portion of rent WE haven't even collected?

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If anyone has any questions or confusion on the situation, please ask. We are debating over a few hundred dollars but in a situation like this, principle is more important. I want the right & fair thing to happen.