Posted by Jeffrey on September 12, 2003 at 14:31:58:
I might just jump in here and note that you may be competing for the same dollar that your new buyer is. Ie, your interest and the new buyer’s may run contrary. By the way, this past due rent is a material fact and must be disclosed to buyer. If I’m the buyer, I insist on getting the right to collect this past due as part of the deal. In one case, I collected from the tenant the past due amount, collected the rent like a hawk for 7 years from same tenant. I then sold the building and the tenant ran up a huge past due amount with the new landlord.
Will be closing on the sale of an 11 unit apartment building in the next couple of weeks. I’m owed back rent on a couple of units. What is the best way to legally retain the right to go after them for what they owe? Get them to sign a note? What?
Re: Past due rents after a building is sold - Posted by ray@corn
Posted by ray@corn on September 10, 2003 at 07:38:11:
Vern,
You have the same legal standing for the collection of past due rent from the tenant as you did before the sale. The lease is a contract between you and your tenant, and your subsequent sale of the property does not change that.
Our local courts require that we have the original lease document in order to sue, so when we sell a property we agree with the Buyer that we will not turn over the original leases until all past due rents are collected or judgment issued.
As a matter of reality though, you can no longer evict the tenant, so you do not have the same leverage. In my experience, about 50% of past due accounts get collected after a sale.