Use and Occupany problem - please read :-) - Posted by Keith

Posted by Scott on March 16, 2002 at 07:55:03:

Better yet, they are way behind on their rent right now. Forget about the 30 day notice deal. You could get permission from the owner in your contract or even after contract has been signed to act as his agent (i.e., representative) and start eviction procedings while you are waiting to close. You shouldn’t need a RE license to act as his agent since you will have an equitable interest in the property, but check on your state law.

Use and Occupany problem - please read :slight_smile: - Posted by Keith

Posted by Keith on March 15, 2002 at 13:57:13:

I’m about to obtain my first property. It’s very exciting. :wink:

Anyway, slight problem, the current owner thought he would give a try at landlording but wasn’t very successful (very motivated). It’s a bad lease, but on top of that he didn’t get a use & occupancy inspection. My question is how might this affect the deal. Specifically, I may have to bring it up to code, so I am negotiating the cost into the deal. Here’s the bigger problem though. I will have to evict the current tenant who seems to be a “pro” since he hasn’t paid for 2 months. I think that I read somewhere that if a rental unit does not have the proper U&O a tenant might not have to pay rent? He could tell the district judge that the unit didn’t pass inspection? Does this sound familiar to the experts? Is this something that would vary by town, county, or state? Any thing else I should know about potential problems of not having a U&O?

Ok, I know this property has some problems. Maybe the seasoned veterans are shaking their heads at this newbie, but trust me if it works out it will be a great deal and if not, certainly a learning experience.

All help greatly appreciated. Many thanks!

Re: Use and Occupany problem - please read :slight_smile: - Posted by phil fernandez

Posted by phil fernandez on March 16, 2002 at 09:09:48:


In my state you need to obtain a "certificate of occupancy " in order to pass clear title. This CO has to be granted by the city the property is located in verifying things like septic/sewer complies with state environmental laws, property adhers to local zoning as far as the number of units allowed etc. Your state I’m sure is a bit different.

Bottom line is, do you want to make the seller’s problems your problem. Also are these problems correctable and at what cost are they correctable at. In a situation like this due diligence on your part should be the top priority. Now saying all that perhaps the problems are solvable, but you will want to be compensated for solving them, perhaps in the form of a lower price or better terms or both from the seller. Your first stop should be with the building inspector and city zoning guy to find out specifically what will have to be done in order to get your use and occupancy certificate.

Now on to the bad tenant that will have to be evicted. Eviction is a long frustration thing. In my state it can take up to 4 months or longer. And as you say you might be dealing with a " professional tenant ". Again if you are required to do the eviction after you take title to the property you should be compensated by the seller for your time, agrrevation and trouble.

All this takes time and money. Especially if this is your first deal I’d take the sure road. Put into your purchase and sale agreement that you only close after the seller has legally evicted the tenant and after he has received his " use and occupancy " permit. There are too many other properties out there for you to buy to get bogged down on one like this.

At least that’s my take. Good luck.

Re: Use and Occupany problem - please read :slight_smile: - Posted by Scott

Posted by Scott on March 16, 2002 at 07:51:13:

I don’t what state your operating in, but in Oklahoma, which is a landlord-freindly state, this would not be a big deal. Even if you don’t have any lease agreement with a tenant, all you do is give them 30 days notice. If they haven’t moved after the 30 days, it might take an additional 3 weeks to evict. We handle these procedures ourselves, but you will need the help of an attorney to begin with. Find out from an attorney who had experience with evictions how long it will take him to get them out and how much it will cost. Figure this into your costs. Use it as leverage in negotiating.

Johnboy?? JPiper?? Phil Fernandez?? HR?? - Posted by Carey_PA

Posted by Carey_PA on March 15, 2002 at 20:18:06:

Can u guys answer this question for this Guy, I’m very curious to hear what you will all say.