Former Landlord kept rents mailed post closing. What would you do

[Shiloh Lundahl]

My partner and I purchased a duplex in Phoenix, Arizona about a month ago.  It was being wholesaled at 102k with both rents equaling $1300 a month.  We closed on April 18 and the rents for the rest of April were pro-rated and credited to us on the closing statement, along with the tenants security deposits.  

We didn't have any access to the tenants prior to the closing.  It took us several days to get their contact information after we had to send one of our team members out to the property to get in touch with the tenants.  

The tenants stated that they sent their rent payments for May to the former landlord already and showed proof (deposit receipts) of doing so.  

I took a while to get a hold of the former landlord and when he finally answered our call he stated that he had not received one of the tenants rents at first.  Then when showed a picture of the receipt for the other rent deposit, he stated that he was charged an extra $300 deposit and pro-rated the rents for may at closing.

After looking over the settlement statement, I saw that the the rents for April were the only ones that were pro-rated and credited and the the tenant's $300 deposits were also credited (as they should be).  But there were no credits for the month of May.  

So I checked with the wholesaler and the title agency who did the closing.  Both stated that the former landlord should send the rents to us because they were rightfully ours.

After trying to contact the former landlord by phone with no success, I sent him a text following up and asking when we should expect to get the rents for May that were sent to him.  He responded saying "I think we are settled on the rents."

What would you do if you were in this situation?

[Steve Vaughan]

I'd take his butt to small claims court.  Get him served and make him show up.  The rents were obviously the property of the new owner (you).  

When I close on tenant-occupied property, I require my seller to bring a letter informing the tenants of the ownership change to the closing.  It can be a general letter stating that as of xx/xx/xxxx a new owner/manager named -------- will be stepping in.  My favorite day to close is the 3rd.  Prorated rents to me at closing for that month, then ample time to get things situated going forward.   

Then I mail the letters tenant letters, signed by the seller myself.  A couple days later I mail my welcome letter that has the pertinent instructions that would have prevented this problem.

Don't take this lying down and 'move on' @Shiloh Lundahl.  Take this guy to task.

Good luck and please keep us posted!