Seller lied about a lease renewal two weeks before closing???????

[Gabe Sirkin]

Multiple conversations with listing agent that one of the four tenants was going to go month to month when their lease expired 12/31/2019. We have documentation of these conversations.

Property set to close by end of January. 4-unit owner occupied FHA loan (so I have 60 days to move in or I'm in default)

Just found out today, that the unit I was planning to occupy, who was supposed to be month to month after 12/31 had a one year extension signed in beginning of December. Landlord claims they just got it back this week, but it was dated December 14. 

WHat’s my recourse? I have almost $1,500 between appraisals and extensions. This whole time i was told they were month to month, and I had all of the leases form my due diligence, yet this was NEVER disclosed. Property was going to close by en

Can I take to small claims for not disclosing about a lease they knew about? I can’t buy the property now because there wont be a unit for me to occupy. This should have came up in due diligence. 

[Charlie MacPherson]

@Gabe Sirkin  I'd get an attorney involved ASAP.  I'm not an attorney and this is my opinion based on the facts as presented.

It sounds like you dealt directly with the seller's agent and didn't have a Realtor representing you.  I'm also guessing from your post that there are no other units available for you to move in to.

It's too late now, but if someone like me were representing you, there would be a contingency in the P&S that "Unit 1 will be delivered vacant and broom clean".  I'd also verify that with a final walk-through a couple of hours before closing.

I'm assuming that there is no such clause in the P&S, but if there is, I think you can sue for specific performance/breach of contract.

Not to rub salt in the wound, but this is a perfect example of where a good buyer's agent is worth his weight in gold.  

Since it sounds like the seller's agent is your point of contact, I would get on him and ask how he intends to fix this.  If he doesn't have an answer, I'd get in front of his managing broker immediately.  Again, I don't have both sides of the story, so it's possible that the agent had no knowledge of the lease renewal.  Gather all the facts before you go nuclear on him.

Either way, you cannot continue with the sale if you can't owner-occupy.  In fact, you'll be required to sign an owner-occupancy affidavit at closing.

As I see it, you have a couple of options:

1. Put it back in the seller's lap.  Tell him that he either gets you a vacant unit (cash for keys?) or the deal is off and you will sue him for damages and/or specific performance.  It sounds like it's his screw-up so let him pay the price to fix it.

2. Just back out of the sale based on your inability to finance.  I'm hoping that you have a financing contingency and that the deadline to exercise it hasn't passed - but even if it has, you still cannot go through with the sale. 

3. Talk with your lender and be upfront about the circumstances.  See if there's some sort of exception that would extend your move-in date until another unit becomes vacant.

In addition, I'd still go to small claims to recover damages.  Those damages include whatever you're out of pocket, plus whatever financial impact it has on your current living situation.  Check to see what the maximum dollar amount for small claims is.  If it exceeds that amount, you'll probably be facing some hefty legal fees to proceed in district or superior court.  Maybe also file a lis pendens to cloud the property until this is resolved.

Document everything you have on the matter. Retain all records including emails, voicemails, contemporaneous notes you took, the MLS listing description (and print/save it before the agent can edit incriminating evidence out), contracts - everything.

This is a mess.  Sorry you're going through it.  Good luck and let us know how it works out.