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Barrister
Barrister, Lawyer
Category: Real Estate Law
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Experience:  14 years real estate, Realtor. Landlord 24+ years
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I am selling a home that is renter occupied. The buyer knew

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I am selling a home that is renter occupied. The buyer knew about this from the beginning that it was tenant occupied.

Circumstances changed where I wanted to cancel the sale of my home, but I was threatened to be sued, so I stayed in the contract.

Now, the closing date is July 31st, tenants will not be out. I would still like to cancel this contract without being sued as so threatened by the listing agent.

I suspect the tenants will be out by Friday or the weekend. Why am I obligated to extend this contract on the account of my tenants? In the contract the listing agent has $300 / day rent if possession is not given to them the day of closing. Does the tenancy imply possession delayed?

The realtor also said I had to pay $250 for the buyers lock rate extension. Is this legal?

This is in Colorado, please advise. I was told it was a privilege to work with this realtor, it is turning into a nightmare.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Lucy, Esq. replied 1 year ago.
Hi,

My name is XXXXX XXXXX I'd be happy to answer your questions today. I'm sorry to hear about your situation.

If the contract requires you to deliver a vacant property, then the buyer is not considered to have possession at a time that your tenants are still living there. That means that the possession is delayed. Because you are the one that has a contract with your tenants, you are the one that can sue them for damages if they do not vacate on the date they are legally required to do so. That means that you're also the one responsible for making sure they're out. If the tenants are aware that they are responsible for rent each day they remain in the property after July 31, that may inspire them to move out sooner. It also can help offset the costs of what you have to pay the buyers if the tenants don't leave.

If the reason that the lock rate has to be extended is because the tenants are still living in the property, that is something that is attributable to the seller. The party that creates the need for the rate to be extended can be responsible for paying the costs, yes. It's not illegal unless there is specific language in your contract that would make it the buyer's responsibility to pay for it, or unless there was some basis for saying that the buyer created the need for the extension. If you're actually closing before the tenants move, it may not be necessary to extend the rate, so ask for verification or paperwork to show that is happening.

If you have any questions or concerns about what I've written, please reply so that I may address them. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for answering your question. Thank you.
Customer: replied 1 year ago.

The tenants are section 8, they have no money no property other than mine.

 

Do I have any options to cancel this contract?

 

What are my legal rights? I was given all of the legal rights of the buyer, does the seller have any rights at all?

Expert:  Law Pro replied 1 year ago.
Hi. New expert here - allow me to assist.

With the section 8 tenants - don't you have an agreement with HUD about such so that they are paying a portion of the rent on behalf of the tenants?
Customer: replied 1 year ago.

My question was not concerning getting money out of the tenants. But for your info, the tenants payment from the city housing authority expires at the end of this month, tomorrow in this case.

Expert:  Law Pro replied 1 year ago.
I realized that - but because of section 8 housing there would be some obvious notices to buyers and the real estate agent.

But I'm choosing not to assist you further, and will opt out.

Good luck to you.
Expert:  Barrister replied 1 year ago.
Hello Barrister here and I will try to help..
.
After reading the previous responses, we may have started off and gone down a road that wasn't necessary....
.
When you signed the sales contract, does it specifically say that the tenants must be out of the property?
.
Meaning are you obligated to deliver a vacant property?
.
.
Thanks
Barrister
Expert:  Barrister replied 1 year ago.

I have to leave and be out of my office for about 5 hours, but will check in when I get back if you would like to continue...
.

If you would prefer not to wait, you can just opt me out and another expert will be along to help shortly.

.
.
Thanks
Barrister

Customer: replied 1 year ago.












POSSESSION. Possession of the Property shall be delivered to Buyer on Possession Date (§ 3) atPossession Time (§ 3), subject to the following Leases or tenancies:
n/a
If Seller, after Closing, fails to deliver possession as specified, Seller shall be subject to eviction and shall be additionally liable to Buyer for payment of $ 300 per day (or any part of a day notwithstanding
§ 18.1) from Possession Date (§ 3) and Possession Time (§ 3) until possession is delivered.
Buyer Does Does Not represent that Buyer will occupy the Property as Buyer's principal residence.

Note: If the parties agree to execute a Post-Closing Occupancy Agreement, the document should appear inAttachments (§ 31).
Expert:  Barrister replied 1 year ago.
Ok, there are two different types of possession, legal possession and physical possession. In this case, I would interpret this clause to mean that you have to deliver legal possession of the property to the buyer at closing. That just means that you have to sign over a deed to them so they are the legal owners. It doesn't necessarily mean that you have to deliver physical possession free of any occupants.
.
When the clause goes on later to mention Seller being evicted, that is only if the seller has remained on the property and refuses to move. I would opine that this applies to tenants whose lease has expired as well.
.
The only thing that causes some confusion is the part that says that the sale is not subject to any leases..." subject to the following Leases or tenancies:
n/a"
.
But, since the tenant's lease is expiring on the closing date, this would technically be legally accurate because the new owner would be under no legal obligation to extend the lease for the tenants if he chose not to.
.
BotXXXXX XXXXXne is that I think a winning argument could be made that you are only obligated to deliver legal possession (i.e. sign a deed over) on the 31st and that if there are tenants there after that, that is the new owner's problem if they fail to move out...
.
Once you have signed the deed, you have delivered possession of the property in accordance with the contract.
.
.
Thanks
Barrister
Expert:  Barrister replied 1 year ago.
But getting back to your original question about cancelling. I don't see any way you could legally cancel the contract without being subject to being sued for breach of contract and being liable for the $300 per day for not delivering possession...
.
.
Thanks
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 23853
Experience: 14 years real estate, Realtor. Landlord 24+ years
Barrister and 3 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

One more scenario; if they can't close tomorrow due to this physical possession, am I obligated to "EXTEND" the contract?

Expert:  Barrister replied 1 year ago.
Typically unless it is stated in the contract that time is of the essence it is generally agreed that buyer and seller will act in good faith in closing the deal. This means that a buyer or seller will grant reasonable extensions. But from a purely legal perspective if either party can't perform on the closing date, the contract is in breach and the non breaching party would be excused from further performance.
.
.
Thanks
Barrister

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