Posted by Jim V on June 15, 2000 at 02:39:01:
There is no legal reason for not renting to a previous owner. Rationally, if they couldn’t make payments before are they likely to make rent payments? There is a good possibility you will have to evict at some point, it might be more long-term efficient to evict now and place a tenant with stronger financials.
Jim V
Renting back after auction - Posted by DJR-Nv
Posted by DJR-Nv on June 14, 2000 at 23:53:14:
Hello,
My wife and I recently purchased a condo at a trustee’s sale. We are planning to keep it as an investment property and rent it out. We will be able to refinance and still maintain a positive cashflow.
The previous owner has been living there for a number of years. As a result the place is in need of some cosmetic rehab; carpets, paint, touch up. The previous owner is elderly and has asked to stay on as a rent paying tenent. I’d just as soon rent it back to him as it will eliminate the need for me to go in and deal with rehabbing and finding a new tenant. Additionally, this arrangement will eliminate the need for me to put this guy out on the street which I’d just as soon not do if I don’t have to.
Here is my question: Are there any legal repercussions in renting this place back to the previous owner? Any advice in this matter would be greatly appreciated.
BTW: I live in Nevada and there is no redemption period here. Thank you in advance for helping me with this one.
Don
Re: Renting back after auction - Posted by Soraya(SanDiego)
Posted by Soraya(SanDiego) on June 15, 2000 at 13:50:26:
Disadvantages:
1- Seller may cause damage to property.
2- Prevents you from access to work on property
3-Still dealing with seller instead of making another deal
4-Person may claim injury. BUY SLIP AND FALL INSURANCE (Allstate has a good landlord policy.)
5- Seller could not keep up with his loan payments so may not be able to pay rent and you may have to evict them.
CAUTION:
NEVER give the seller an OPTION to buy property back. In California this causes big problems. May be construed as a usurious loan
Soraya
Re: Renting back after auction - Posted by Troy M
Posted by Troy M on June 15, 2000 at 09:24:11:
Don,
I had a similar situation last year with some differences. I won’t bore you with the details, but my attorney advised me to get an additional agreement (CYA) signed stating that the previous owner had no legal rights to the property (should they default on the lease agreement), would not contest an eviction, and that I would be “entitled to a judgement of possession in the forcible detainer court” in the event you do have to evict this person. It’s not 100% ironclad, but it certainly won’t hurt your case should you need it. Hope this helps.
Troy M