Closing on rental soon, existing tenant behind on rent

[Raven Parmer]

We are under contract on a new place, a duplex with a separate garage apartment. The owner passed away, and her daughter is selling the property. From what she can tell there is no lease, and the tenants are unofficially month-to-month. we are buying this house to live in and convert to a single family. We plan to keep one tenant - "the guy" - for at least a year. The seller says the other tenant - "the girl" - is often late on rent and is currently $2000 behind (July rent -$850- has not been paid). We have asked the seller to give her the 30 day notice before we close so that we can have a clean break and not have "the girl" in the house at all. The seller doesn't want to do that because she thinks that might hinder her chance of getting her money back. But, if we close, and "the girl" is still in the house, we won't have any kind of lease or security deposit. I guess we would immediately give her 30 days notice, and hope she pays us for the month she's there? And hope she doesn't trash the place. Because if she's $2k behind, there's no way she can come up with rent+ security for us. Our agent has been speaking with a real estate attorney but I wanted to see if you guys had any good advice too! Thanks!

[Chris T.]

I would not close on this property until this is resolved. Is this one of the reasons why the seller wanted to sell? Once you close, the seller's headache becomes yours. I would have your attorney delay the closing until they move out. If not, have your attorney calculate the potential loss rent, eviction costs, and potential damages to the property, and have the seller credit you at closing. You still hold all the cards, unless this is a screaming good deal. And you're prepared to deal with the headaches.