Sellers Tenant refusing to move, rent control, Los Angeles

[Antonio Scerra]

I would like to start by saying that this is my first post to the Bigger Pockets community and I am very excited to be a part of it. With that being said, I am reaching out to you guys for guidance regarding my situation. Thank you for your time. So here it is......We are currently in escrow and I was just informed that the Sellers tenants are refusing to relocate and even threatening the seller that they will sue him. We are in a rent control area in Los Angeles and we are abiding by the relocation rules. The agreement is that the seller is going to provide the funds to pay the tenants the relocation dues and I as the new owner will occupy the unit that they are moving out of after the proper amount of time is given to the tenants to relocate. The seller's agent informed my agent that the seller wants to cancel the sale due to the hardship that the tenant is causing. Would it be wise for me to back out of this purchase? By continuing with this purchase, does the tenant become my problem? Does the tenant have any grounds to pursue a lawsuit? How long can they drag this out for if the sale and relocation assistance is being properly executed? Any help or information would be greatly appreciated. Thank you. 

[Jason Krick]

I have very minimal experience, so take this with a grain of salt.

Everyone has had fantastic advice, but for me, it boils down to one simple fact.  Your contract states that the seller delivers the property with the unit vacant.  I'd hold the seller to that.  How does he/she get the tenant to vacate?  Not your problem.  It's the seller's responsibility to perform their part in the contract.  If he/she doesn't perform, I would think there are legal remedies you could pursue towards the seller.

I don't think that waiting six months is worst-case scenario.  There are many stories on here about situations that took much much longer to evict.  Sure, you may eventually be entitled to the relocation escrow.  But, what if the current tenants cause six figure damages to the property?  What if all the nice mechanical systems that were replaced in the last five years are destroyed?  What if their behavior makes life miserable for the other tenants, so that they move out too, and nobody is willing to move in?  

I understanf that the process should eventually allow you to take up residency in the main unit, but I'd be very hesitant to assume that the property will be in the same condition as you see it now.  So, the simple solution, in my mind, is to stick to the clause that states the seller will deliver it vacant.  Let the seller handle it.