Rented Property Purchase

[dave111223]

I'm in the process of buying a townhouse for business use. There is currently a tenant using the property (after school teaching).

Seller initially said that the tenant did not have any lease/contract and would leave after we purchased. We have been digging deeper and contacted the tenant directly.

And it appears that the sellers has not been completely honest and in fact the tenant does have a lease until June, but according the seller the tenant has not paid the rent for 6 months and so lease is no longer valid.

We are trying to arrange a sit down with the seller and tenant before the deals goes through to see where we stand.

If we go ahead and purchase the building what the options be? We want to use the building as soon as possible for our business. Details:

- Tenant has lease until June paying 10,000 per month

- Tenant has not paid rent for last 6 months

- Building will be costing us 23,000 per month in mortgage payments

Suppose we are unable to reach an amicable agreement with the tenant (ie doesn't want to pay rent or leave) and we just change the locks immediately upon purchase where does this road lead?

Edited April 1, 2010 by dave111223

[InterestedObserver]

What does the lease say about non-payment and what are the circumstances of the 6 months rent arrears. If the lease contract has been terminated due to non-payment of rent, give the tenant his legal 15 day notice, demand payment, and then lock the doors/kick him out. But I would hear the tenants side of the story first.

Edited April 1, 2010 by InterestedObserver

[dave111223]

According to the seller the terms of the lease are such that if rent is not paid then the rent is subtracted from the security deposit, once the security deposit is all used up (which it currently is) then tenant is in breach of the contract.

We are going to confirm all these details with the tenant, but if this was the case would we be correct to demand all the unpaid rent which was owed to the previous owner, or only the rent due from this point on?

Edited April 1, 2010 by dave111223

[InterestedObserver]

You should try and get this resolved before you purchase the townhouse. Have the present owner give the tenant his legal notice for termination of contract at least 15 days before you close the deal. You don't want to inherit this problem.

Edited April 1, 2010 by InterestedObserver

[Jonathanpattaya]

Personally, I would leave this property alone.

However if you really want it, have a quick chat with a lawyer.

[GarryP]

The tenant needs to be out before you purchase. Otherwise, you may find yourself having to get him evicted by going through the courts which can take a number of years.