Please Help! Wisconsin Multi-Year Lease

[Alisha Boulter]

Today is a horrible day.  We closed on our first duplex 2 days ago and I contacted our property manager/realtor today to discuss sending rent increase notices and they pulled up leases to see that the lower unit is leased until 6/2021 and the upper unit is leased till 6/2025! My heart is sinking.  The rents are very low and have me paying all utilities.  This was our first occupied unit and multi unit, so of course, I did not do my due diligence, as my property manager is also my realtor and when the offer was written, we put langelade that stated “tenants are to remain month to month leases”, so I had assumed that my realtor had verified the lease terms, as we had discussed increasing the rents.  Buuuutttt now, I am stuck with a property that is not going to make me any income and I will be lucky to break even after utilities.  I am so mad at myself for not asking to review the leases. Now I know not to depend on anyone else, even though I trust my realtor/manager and I know it was an oversight on both our ends.  My question is if anyone has any tips? I told my realtor that we may just have to re-list it and pray we can sell it.  

Thanks! 
alisha  

[Marcus Auerbach]

Don't beat yourself up, that's the whole point of having an agent represent you! It's called feduciary duties. For an investment property a 5 year lease and rent under market is a material adverse fact, which means a number of things:

1.) The listing agent had to diclose it - check MLS

2.) Your buyer's agent had the duty to discuss this with you

3.) If MTM was written in the offer and the seller signed it, they knowingly missrepresented the property

Sidebar: an agent you are required to demonstrate the necessary skill for a particular deal or at least get guidance from their broker. If you are a residential agent with no commercial experience, you can't just list a gas station for sale without understanding the environmental implications. Unfortunatly there are not many agents who understand lease issues; I have been an investor longer than an agent and even today I don't know more than a hand full of full time agents who are propery owners and therefor know first hand..

Anyways, I would make all three parties aweare of the situation, beginning with your PM/agent. See what they say, escalate to the listing agent/seller, if necessary to the WRA. If you can't reach a solution, consult with a real estate attorney. Was this in Milwaukee? If the lease was signed with the original owner, check the date: was it signed before or after the offer was accepted. Was this the owner giving the tenant a good bye favor? You have three parties here you can hold accountable to make up your losses, the tenant is not to blame.