Security deposit problem

[Nikolas Abele]

Hello everyone, this will be our first duplex and looking to get a solid answer on a situation we are having regarding security deposit on tenant currently living at property we are buying.

Hopefully I can make this as clear as possible. So we are past inspection and negotiations at this point and our agent just told us he just got word the current tenant had put their notice in and their last day will be 11/1(which means they put their notice in before we even looked at the property for the first time). We were told before inspection that they were thinking about putting notice in. Anyways after we did offer we were allowed to see their unit and it was absolutely destroyed. We accepted it and inspected it assuming we would carry over with their lease (month to month) and they deposit would cover all the repairs. The problem is the listing agent is wondering if we want to keep them as tenant or not. If we don’t they most likely will make them leave before closing so the seller gets deposit due to them destroying the place. If we do, we run the risk of having to evict and Minnesota right now is not a good place to try and evict. I’m wondering if it is what it is and we just have to deal with it or we have a legit reason to argue that their notice was never disclosed to us so we could of negotiated something with it. 

Any knowledge on this situation would be great.

[John Woodrich]

Welcome to BiggerPockets.

First thing first - you are requesting a "solid answer" to a legal question.  Only way to get that is to pay an attorney for advice.  Coming here for legal answers you plan to rely on could get you in trouble.

If the tenant had already given notice to vacate and you were told after the fact that the tenant may be putting in their notice it sounds like misrepresentation/fraud/deceit but it could be a miscommunication between the agent and the owner.  The conversation between the agent and the owner could have happened before notice was given.

From your post it sounds like the damage deposit is enough to cover the repairs.  If that is the case most of us wouldn't call the unit "destroyed", that is just part of doing business sometimes.  If I were in your shoes I would probably schedule a walkthrough after the tenant leaves and before you close to see what you will have to deal with.  If it is the normal stuff I would let it be and plan for the needed repairs to get it occupied.  You can try to negotiate for part of the deposit but fighting over $1,000 isn't going to make or break this deal for you.