This is a very odd post. A "friend" of mine purchased a property with a 5% residential loan. The buyers broker told him that there were tenants in the property but would be out within two weeks after closing. The buyer reviewed property disclosure and thought he saw a date with this year on it of leases ending and signed it. The actual date was a year from now not two weeks. He goes to closing and asks closing attorney who will be liable for the tenants during the two week difference. Attorney tells him well you will be it's your property. At no point were the current leases transferred to new owner. After closing buyer reviews the property disclosure and finds out that yes in fact the lease is for 2022 not 2021.
The buyer then calls seller agent who gives him the key and leases day after closing and tells him really sorry I feel bad for you. Not only is there a lease in place but there is 3 separate leases. All in the name of seller.
The questions:
Was the attorney supposed to transfer the leases over before closing. He finds out later that yes in fact the closing attorneys office did have the leases but secretary did not inform him of them. It was also disclosed in the MLS listing but everyone involved overlooked the dates. The buyer agent and buyer.
How do you transfer the leases properly?
How does the deposits get transferred?
Is there any action to be taken against closing attorney, seller & buyer agent?
The problem the buyer got a residential loan with owner occupied insurance in a separate escrow account. He is sitting extremely liable. Wants to protect himself and does not know what to do. Every attorney he has talked to says there is little to be done. Mortgage fraud? He was told by closing attorney that since there was no intent to defraud he should not worry. What about insurance liability? If a hurricane comes and wipes it out and carrier finds out its tenant occupied they will not pay. If he changes insurance the lender will be notified and possibly call the loan.
It does have a line in leases that lessor has the right to give 90 day notice if home is sold, at which time lessee must acknowledge and be out in 90 days unless agreement by new owner waives this right's well as a line if any legal action be brought by either party the prevailing party shall be reimbursed for all attorney fees and costs.
He does believe it was an honest oversight by all parties and does not want to sue but also do not want to get the loan called. Please advise. Willing to pay for legal help.
Thank you
Attorney lawyer South Carolina fiduciary council transaction court
