Seller unable to locate lease agreements

[Craig Newborn]

I am in the midst of purchasing rental properties from a lady who's husband recently passed away. He was an investor and since his passing the wife wants nothing to do with these rentals. The units are currently being managed from an elderly lady whom lives in the complex. Other than bailing on this deal, any suggestions on what I can do here if she is unable to produce the agreements? Thanks guys!

[Ann Bellamy]

She's unlikely to work with the tenants to get letters of estoppel if she wants nothing to do with the tenants and doesn't know where the agreements are.

My suggestion would be to ask her for permission to work with the tenants, get it in writing from her, along with contact info from the wife or the other lady managing the property, and then go and talk with each tenant. If this is not a large building, it might not be too much work, and is an opportunity to reassure the tenants that you don't want them to leave. If there are rental agreements, the tenants might have copies.

Then if they say there is a security deposit, the wife will need to come up with that money, or provide evidence to the contrary.

Depending on the state laws, the agreements may not be in effect anyway, and you can institute new agreements. The main sticking point will be security deposits.

I'd also adjust my purchase price to compensate for this, as she will have the same trouble selling to anyone else. This is not a great solution, but the most realistic I can come up with.