Hi Fellow BPers,
I need some advice. I have a closing for a commercial multi unit in Delaware and 1 of the tenants was given notice of lease termination. This guy was not paying the increased rent amount set by seller and only the old rent amount. I did notice this during my diligence and his arrears are in the $6k range. I did make sure to notify them, months before closing date, that I did not want this tenant and closing would be contingent upon him being evicted. I have a week till closing and the latest update is that he has not moved out despite receiving notice from them 60 days in advance. I have even suggested that the seller buy him out to avoid court and delay closing but no response to that.
Correct me if Im mistaken , My stance is to close and not make this a huge issue. If we are to close in a week, my concerns are:
- I need to secure the potential loss of rent (he has not paid this month's so far) from the seller till he is evicted by the courts. I am told this takes process takes 30-45 days to by courts and sheriff to evict him physically. I am thinking escrow this by the seller for 2 months rent.
- We did not have an opportunity to inspect that particular apartment due to tenant's refusal (it is a 1 bedroom unit) and am worried about him damaging the place once he leaves. I do not feel the one month rent deposit will be sufficient and would like to be protected in this potential event. I am thinking of having seller escrow this too- would 1 month suffice or 2 months rent?
Am I right to take the escrow route? What do you folks suggest?
Appreciate your help.
Thanks.
.
