About a month ago I bought a 4 unit apartment building.

After closing, the seller was supposed to meet me at the building and introduce me to the tenants as well as hand over the keys and leases etc. She did not. She sent her boyfriend over with the keys and the leases I had to get from her a week later after tracking her down.

She is stating that because we (me and my realtor) did not ask for the prorated rents, the security deposits and the last months rent at the time of closing that she no longer has any obligation to pay them to me. She claims that this is now the title company's responsibility.

The only official wording about prorated rents/deposits to be paid was in the purchase and sales agreement. The title company says its not their responsibility to include wording in the actual closing paperwork. My limited understanding of this is that these matters are all taken care of between the realtors anyway.

I can only prove/show receipts for last months + security deposit for two of the tenants.

One apartment vacated the premises two weeks after I bought the building. They claim (only verbally) that in addition to the last months rent they had already paid, they gave the seller an additional deposit for damages they did to the windows and doors (but had never paid an official security deposit up front).

I also come to find out that another of the tenants did work in exchange for their next (2nd) months rent. And I completely believe them. Even their five year old kids were telling me how they helped mommy and daddy scrape floors and pull up stables. This was never disclosed to me that I'd have a tenant not paying any rent for a month.

While this tenant has no intention of leaving, what theoretically could happen is that they could not pay a single dime (to me) for two and half months, move out and expect me to then pay them their security deposit back. This is just wrong and I can't believe the seller is protected from handing over any rents, deposits because of some unwritten buyer-beware clause.

So is my only recourse to take the seller to small claims court? Is withholding these securities/rents a criminal offense of some kind? Should I pursue a small claims case or simply go to the local DA or Sheriffs office?

If I do take the seller to small claims court (or should I say when) should I also include her realtor and/or my realtor as well?

As far as a possible small claims case against her, does anyone know if I am I allowed to ask for additional "you've-wasted-alot-of-my-time-and-caused-me-alot-of-grief" money?

The sad thing is that during closing the seller told me that I looked like a nice guy and that if I was to become a landlord I was going to have to get tough real quick. Little did I realize HOW quick. The only one I've had an iota of problems with so far is her, the seller.

Thank you for any help and advice you can give me!

Hello Clay:

Well, of course, I don't know what your purchase and sales agreement says. THAT'S where you'll find the obligations of the parties...

However, I think you should sue the seller (not the realtors - yours OR hers). The worst that can happen is that you'll lose, and it only costs about $50 to file. No, you cannot get paid for your time pursuing the suit.

excon

Are you sure that the maximum amount allowed in small claims court will cover the amount that the seller owes you? If so then you should sue everyone--the seller, her realtor and your realtor.

What the seller did was not a criminal act but they are definitely required to turn the rents and deposits over to you.

Hello again:

I like Lisa's answer better than mine. Sue 'em ALL!

excon

Hello again:

I like Lisa's answer better than mine. Sue 'em ALL!!

excon

LOL!

If you sue everyone involved then you don't run the risk of having a judge tell you "Oh, you should've included so-and-so in your suit. Now you'll have to start all over again." And if the people really shouldn't have been sued then the judge will just dismiss the case against them.

Normally I wouldn't tell you to sue the realtors but from the original post it sounds like they were responsible for conducting the closing, so the transfer of rents and deposits is something that they should have at least pointed out.

Well, I haven't filed a small claims case as yet as I'm told that I must first honor the mediation clause in the purchase and sales agreement.

But I've got another two questions! One related and one not.

One tenant moved out two weeks after I purchased the building (The story is that they moved out owing rent so the seller doesn't have to pay any prorated rent for them. Actually, the seller is trying to claim that she should be able to deduct the rent THEY owed her from the prorated rents/security deposits she owes me -but that's neither here nor there (and obviously complete and utter hogwash)).

These tenants left the apartment a mess which left me with two days of cleaning/scrubbing and moving HEAVY junk and about 80$ of dump fees (the seller claims they never paid a security deposit so nothings coming my way for them (go figure)). Anyway these tenants left a storage shed in the parking lot. Its been four weeks since they moved out and two weeks since I reminded them that it needed to be removed.

What measure's do I need to take/follow before this shed is considered abandoned and I can either have it hauled or sold?

My second question involves the original post.

When I take the seller to court and assuming I win, what laws are in place that assures that she will even bother to pay the judgement? I might be borrowing trouble, but from her behavior it seems highly likely she will just thumb her nose at this and leave the judgement unpaid.

I thank everyone that answered my OP. Your time and advice are much appreciated. Thank you.

With regard to the shed, send a letter to the tenants at their last known address. Send the letter by certified mail, return receipt requested, and send a copy by regular mail as well. On the envelopes make sure you put "Forwarding Requested". In the letter inform them that the shed is still there more than 2 weeks after they promised they would remove it, and if they don't remove it within the next 14 days then it will be considered abandoned and you will hold them responsible for the costs you incur in disposing of it. Then if they don't pick it up within those 2 weeks you can dump it or sell it and keep the money.

As to suing the seller, if you win a judgment then you can have her bank account attached or her wages garnished. Also, that judgment acts as a lien against any property she owns. She'd have to pay it if she wanted to buy, sell or refinance any real estate.

I will add this, all of the money balances are normally done at closing, it is part of the plus and minus sheet done along with taxes and any other prepaid or owed items.

You may want to consider this in all future purchases.

At this point you will have to sue as noted.

Welcome to the wonderful world of being a landlord.

I have to ask the question, though I suspect I know the answer. Where was your attorney during the closing? What? You didn't have an attorney?

I don't understand how anyone can go into a business venture without fully exploring what they would be getting into. Sounds like the seller saw the sucker sign on your forehead and took advantage of you.

As noted, all deposits, pro-rated rents, leases, keys etc should have been turned over at the closing. You should have never handed over any money until that was done.

As for the tenants leaving a mess and abandoned property, that's par for the course. Its all part of being a landlord.

I strongly suggest that you get yourself an attorney and that you join a local landlord's association.

I have to ask the question, though I suspect I know the answer. Where was your attorney during the closing? What? You didn't have an attorney?
The mortgage company provided the attorney. They are telling me however, that it wasn't their responsibility to carry over any of the prorated rent wording from the purchase and sales agreement.



I don't understand how anyone can go into a business venture without fully exploring what they would be getting into. Sounds like the seller saw the sucker sign on your forehead and took advantage of you.

Simple answer: I just didn't have the time and really, how many sellers try to withhold security deposits and last months rents from their buyers? The amount compared to the money she received is very marginal.

The purchase was done very quickly. The downpayment assistance program for which I was getting my downpayment was being discontinued. I was being told almost every week that closing HAD to be brought up by an additional couple of weeks.

That meant that I didn't have the time to bargain or add a bunch of contingincies like: remove this pile of rubbish from the side of the building etc. If the seller decided to take time to think about things too much, we'd miss the deadline.

I didn't know this at the time of course, but if I hadn't been forced to rush into the purchase of the building due to the down payment assistance program being discontinued I would probably have lost any hope of financing due to the current financial crisis and the subsequent tightening of mortgage requirements. As it was, I barely qualified.

But I got 20,000 off the asking price of the building + the parking lot across the street which the seller wanted to sell separately (and in retrospect I probably wouldn't have been able to buy the building without parking anyway).

For the record: buying this building is the best thing that's ever happened to me. It is structually in great shape (roof getting repaired now). T has four units with three tenants paying their own utilities that more than cover the mortange. Plus there is a third and a half floor (unrenovated) with over 3000 sq ft of space.

Beneath the worst, mold and stain encrusted carpets you ever would want to see are beautiful wood floors that are sanding up well... beautifully. The place is starting to glow with some care and a bit of an artistic eye.

Thanks for the help! I appreciate reading them all

(no time for a proofread, I got to get to work)

Hello again, clay:

I've got one thing to say, "Pacific Heights", the movie. Rent it!

excon

The mortage company provided the attorney. They are telling me however, that it wasn't their responsibility to carry over any of the prorated rent wording from the purchase and sales agreement.)

No, They had an attorney representing THEIR interests, not yours. You needed someone representing YOUR interests.



Simple answer: I just didnt have the time and really, how many sellers try to withhold security deposits and last months rents from their buyers? The amount compared to the money she received is very marginal.

All the more reason you should have had an attorney to represent YOUR interests.

After your response here, I'm even more convinced the seller was going to try to squeeze every penny she could out oif you.

But the bottomline here is you will have to sue her to get her to come across. Whether you have grounds is hard to tell, but if you go for small claims court, its not a lot of risk.