Posted by Penny on April 20, 2007 at 07:30:38:
To answer both of your questions, an attorney should review the purchase agreement contract to see what was actually written and examine the contingency clauses for you.
Since the property is being sold “as is and where is condition”, this would seem to contradict any expectation of the buyer expecting the seller to spend any money in regards to deferred maintenance to get vacant units rent ready. It also depends on what was actually written in the contract, not verbally agreed to, and whether the seller’s business activities in question are the same property management activities that would be doing reasonable activities to prepare vacant units for rent.
The pro forma figures are sometimes accurate but often represent the property’s potential income, with the actuals being a little lower. Pro forma should be verified against actuals by the buyer during the due diligence process that occurs prior to closing, assuming there is such a clause in this purchase agreement for the buyer. This gives the buyer the opportunity to ask for and receive actual property data, review it, and renegotiate or back out if the actual rent rolls/expenses don’t match. Once the deal is closed, it is most likely that there is no recourse.
Since it ultimately depends on what was written in the purchase agreement, this is why you should consult an attorney.
Good luck! (PS I’m not an attorney.)