Seller Still Occupying Property at Closing

[Fan Bi]

Over the course of the past few months, my wife and I found, inspected and financed a triplex in the Providence, RI area. The final walk-through was scheduled for 9/9/16 at 9am, with the closing at 10am. When we arrived, it was quickly evident that the seller and family were still occupying all three units, and had made no intentions to leave.

We asked the listing agent about the situation, and he was both dumbfounded and lacking in communication. We subsequently went to the agreed-upon lawyers office to close (and hopefully understand from the seller's attorney what was going on), only to find out from the seller's attorney that his client requested another 60 days. 

The damages are time planned off-work for fix the property for an October 1 rental date, cancelled contractors, but most of all missing an October 1 rental date which puts us in risk of having extended vacancy through a New England winter. 

Are there any attorneys or real estate investors who have seen or experienced anything like this?

[Brandon Ingegneri]

Okay. I have your number. I am going to text you the right attorney's contact info. 

Having said that, here is your best strategy. Close on the house, but renegotiate a holdback. Back out their rent for the 2 months including a security deposit equal to one month's rent per unit. This way, you aren't chasing rent, and if they screw up, you have the deposits. 

Here is the angle. Set a firm date that they have to be out. X time on such and such a date. You'll do your walk through at that time and make a ruling on security deposit. Prior to this, you will have negotiated a holdback (depending on what they owe and purchase price). Attorney will hold 5,10,15,20, whatever is escrow to be distributed upon execution of their moving in accordance with the agreement that you negotiate. If they mess up, you just got a discount on the property. If they abide, they get the check from the attorney and their security deposit. 

You get the house, and protection... they get their 2 months and all of their money. Everybody wins. It just has to be sold to them properly.