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A-LEGAL-MIND
A-LEGAL-MIND, Lawyer
Category: Real Estate Law
Satisfied Customers: 466
Experience:  Owner of a law firm which handles real estate transactions.
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Bought property from auction.com . . . real estate agent set

Resolved Question:

Bought property from auction.com . . . real estate agent set up meeting to see the property and meet the owners. The contract from auction.com says not to disturb occupants - so if we go meet them tomorrow . . . is that "disturbing?" and thus liable for liquidated damages?
Submitted: 9 months ago.
Category: Real Estate Law
Expert:  A-LEGAL-MIND replied 9 months ago.

A-LEGAL-MIND :

Hello and welcome to JustAnswer.

A-LEGAL-MIND :

I would be happy to answer your question for you.

A-LEGAL-MIND :

To answer your question..........Yes, setting a meeting to see the property and meet the owners can be construed as disturbing the occupants.....within the typical meaning that term is given in real estate contracts. In this situation, it seems that the other party actually put these terms within the contract which you both signed agreeing to all of the terms. I would be wary of violating any direct terms in the contract as this could be reason for a party to receive any damages.

A-LEGAL-MIND :

Does the contract address liquidated damages and liability for disturbing the tenants?

A-LEGAL-MIND :

The plain language of the contract typically controls when dealing with contractual issues...........However, with certain issues you can also look to other evidence concerning the intent of the parties when entering into a meeting of the minds.

Customer:

wow . . . ok - my husband thinks 5,000 . . . but we are willing to close no mater what . . . they want to rent from us

Customer:

but thanks . . . will call auction.com and make sure it is ok with them . . . before we go. would that make it ok? a waiver?

A-LEGAL-MIND :

If the liquidated damages clause would penalize you then No.............although you could argue waiver as an affirmative defense......in certain legal situations........here it would not be a good fit. When it comes to real estate contracts.....the statute of frauds typically requires the contract and any modifications to be in writing.

A-LEGAL-MIND :

It is best to avoid any legal issues and simply push back any discussions (ie potential violations of your contract) until after closing in order to comply with the legally binding terms of your agreement and so as not to violate any provisions causing a trigger for liquidated damages.

Customer:

ok . . . have one more . . . can I ask a new one?

A-LEGAL-MIND :

Yes, I can assist you if it is a related question. If you have multiple lengthy questions it is typically proper to Accept one question, then ask another for possible additional accepts. Please let me know. Thanks.

Customer:

It is about the same property but about a lease . . . related? If not, I will understand . . .

A-LEGAL-MIND :

Go ahead. Please

Customer:

contract says must honor leases on property . . . there is a lease on a building we wanted to move into. The structure was built without a permit from the county. Valid lease?

A-LEGAL-MIND :

That is an interesting question..........in a situation where a real estate contract states that you are subject to a lease, you must honor that language and you have bargained for this in your exchange. However, in a situation where a rented structure was built without a permit (the lease may not be legally valid.........due to the illegality of the structure). In addition, there comes the question for one as the new owner...........Am I allowed to maintain this structure, and will I be able to get a permit to allow me to sustain this structure.

A-LEGAL-MIND :

I believe the landlord in this situation must take the property subject to any lease........as per the agreement......As the property is being purchased with the knowledge of the lease and the fact that the structure was illegally built. The landlord has bargained for the risk of that lease being interrupted due to illegality of the structure.

Customer:

For now, we wanted to live in it . . . we own it. We are not leasing an unpermitted structure . ..

A-LEGAL-MIND :

Have you attempted to take out the clause requiring that leases be honored?

Customer:

HMMMMMM we are in closing now . . . can we do that?

Customer:

We are not allowed to inspect so we did not know about the lease that the owner who has been forclosesure for years put together with the tenant

Customer:

we got this from our real estate agent who talked to another real estate agent

A-LEGAL-MIND :

You can always attempt to negotiate terms in a real estate contract and don't sign anything you don't feel comfortable with.

Customer:

hmmmmmm, i think we will put in honor all LEGAL leases on permitted structures.

A-LEGAL-MIND :

In a typical situation most don't.........they simply sign. However, if you ever have a real estate attorney attend a closing with you they would explain the contract terms to you and make certain you understand what you are agreeing to and accept the terms. There should be a meeting of the minds.

Customer:

I see . . . ok . . . yes a bit odd . . . not allowed to inspect or damages and normally honoring leases not a problem.

A-LEGAL-MIND :

There have been some changes in the laws over the last few years in the case of foreclosures however...........

Customer:

ahhhh . . . this was a foreclosure.

A-LEGAL-MIND :

which require those purchasing foreclosures to include individuals who are renting from the owner in the lawsuit foreclosing on the property and tenants have been given more rights..............

A-LEGAL-MIND :

allowing the tenants to have their leases honored.

A-LEGAL-MIND :

as long as it is a valid lease

Customer:

hmmmm

Customer:

I do not think that the bank know about the leasing of the unpermitted structure. I can not imagine they mean to force the honoring of illegal leases. Will we be able to evict them?

A-LEGAL-MIND :

It would appear here that the lease may be considered valid and the tenants would have a right for a new landlord to honor the lease..................That being said........one can always offer to renegotiate the terms of a lease or offer cash to leave, etc. So there may be another way to get the desired end result.

A-LEGAL-MIND :

However, you originally stated that you want to live in the illegal structure, essentially replacing the current tenants.

A-LEGAL-MIND :

In that case, pointing out an illegal structure on the property may not have the intended result.

A-LEGAL-MIND :

The penalty for an unpermitted structure would likely be a fine, followed by more fines without removal.

Customer:

ahhhh . . . it is a nice place . . . built well . . . so odd they did not get a permit. they are not likely to want to leave since the deal includes part of a commericial kitchen

Customer:

So, I would have to get it permitted or demolished if I brought it to everyone's attention.

A-LEGAL-MIND :

Likely, or hefty fines/fees can result.

A-LEGAL-MIND :

In addition, there is still an issue as to the tenants as well.

A-LEGAL-MIND :

If your actions were seen as breaking the lease or forcing an illegal eviction (as opposed to going through the courts properly) you can become liable for rents/penalties and fees to the displaced renter.

A-LEGAL-MIND :

Seems crazy, but most states discourage "self help" when it comes to evictions.

Customer:

Oh . . . I was going to go to court and all . . .

Customer:

But, I can see the court not likely feel our pain about an illegal unit if we want to live there . . .

Customer:

It is not a slum!

Customer:

Really nice property

A-LEGAL-MIND :

There would be two questions..........one of the legality of the unit and what penalties would be incurred/corrections required and two whether there is a valid lease that must be honored.

A-LEGAL-MIND :

Sounds nice

A-LEGAL-MIND :

So it may be worth problem solving here.

A-LEGAL-MIND :

if its worth it.

Customer:

Right! You are great . . . I do have more questions . . . but it can wait for a new ticket . . . thanks . . . will inform my husband

A-LEGAL-MIND :

However, as I understood your previous question.............you are not permitted contact with the renter.......

Customer:

Right . . . will not! Just let my husband know what is going on and be ready for the close and perhaps make a change on the contract.

A-LEGAL-MIND :

However, as mentioned you can attempt to negotiate real estate contract (terms).

Customer:

if we can

Customer:

we will try to add in leases on permitted structures

A-LEGAL-MIND :

Good Luck..........I hope you are able to negotiate a deal.

Customer:

if not . . . we are NOT going to court . . . that would be BAD . . . very nice place . . . 19 acres, two houses (one permitted) and a commecial kitchen and venue . . . very nice . . . but headaces coming

Customer:

Will see you later with other questions . . . we are new to real estate world and operating blind . . . . LOVVE this service! How can I find you . . . just look for LEGAL-MIND

A-LEGAL-MIND :

Yes, the courts are not always a fun place to be. Thanks again for using JustAnswer and please remember to click Accept if you are satisfied with my answer. Yes, please search for a Legal Mind. Thanks again.

Customer:

although . . . even if contract said no need to honor . . . do we have to anyway since we can't go to court

A-LEGAL-MIND :

As mentioned previously recent changes to the laws regarding foreclosures do provide renters with rights and one may be required to honor a valid lease on any property and would be subject to the terms of a valid lease and using the legal eviction process when able to do so.

Customer:

ok thanks . . . honestly . . . have more for later . . . but we are good for now!

A-LEGAL-MIND :

Great! Thanks again.

A-LEGAL-MIND :

Please remember to click Accept if you are satisfied with my answer. Thanks for using JustAnswer.

Customer:

ok

A-LEGAL-MIND, Lawyer
Category: Real Estate Law
Satisfied Customers: 466
Experience: Owner of a law firm which handles real estate transactions.
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