Wrong existing lease in purchase agreement

[Brad Hadley]

Hello everybody! I have an issue I was hoping some experts may have advise on. I purchased a duplex a month ago and am house-hacking it. In the purchase agreement they included a lease for the existing tenants in the other unit. It stated that they were paying rent of $1050/mo. However, it turns out that was not the correct lease, and the current tenants are paying only $850. This obviously makes my numbers not work so well. Should I contact the investing company that sold me the duplex and try to see if they will make up the difference? Should I talk to an attorney? What is my next step to recover the $200/mo that I was lied to about? Thank you in advance. 

[Andrew B.]

Quote from @Brad Hadley:

Quote from @Charles Carillo:

@Brad Hadley

How do you know they are paying $850, not $1050? What does their lease say? Or did the tenants just verbally tell you they are paying $850? If the signed lease you received in due diligence says $850, I think you are out of luck. If the actual lease says $1,050, and it is signed by all parties (and it is valid), the tenants might be trying to pull one over on you. 

I would review and confirm the lease you have for the tenants is the correct one for the property (with the correct tenants on it), and that it has been signed by all parties. 

 The lease I received in due diligence says $1050 but is not even for the people living there. Wrong names, wrong lease. Tenants provided a lease extension that says $850. Is this something I could have verified in due diligence? I'm assuming I can't contact the tenants before closing to verify...

 Next time, you need to request a signed estoppel form agreed to by both tenant and seller. This would lay out important lease terms like rent rate. That is how you would have caught this. 

For now, you could certainly sue the seller for misrepresentation. You're incurring a financial loss due to their negligence. You might not win and it might not be worth the money, especially if you have to pay a lawyer. A good first step might be to ask them to reimburse you and be ready to negotiate a little.