Mom and Pop 16 unit doesn’t have any records

[Jeremy Woods]

Hey Everyone, I will try my best to make this long story short. We are getting close to closing on a 16 unit complex. The problem we have never thought of until now is that because the owners have struggled to provide normal documents like rent rolls and leases (a lot of the tenants have been in their units for years, now renting month to month) we worry that when it comes times to transfer over security deposits there will either be none or the amount will be minimal. We aren’t as worried about the amount as we are the lack of book keeping. The fear being that the owner says this is all we collected and tenants come after us saying here is my original lease I want my deposit back. I was thinking of writing some amendment for the owner to sign saying they didn’t collect any security deposits from A,B,C tenant so that if this issue comes up in the future we can refer them to the sellers. Am I being overly paranoid here? We just have always purchased places with leases that state the security deposit amount and that amount is transferred at closing. Thanks in advance for any feedback.

[Ali Hashemi]

Seems to me to solution is fairly simple. Deduct the amount of the deposits from the agreed upon purchase price and tell the seller not to worry about transferring them.