Is it legal for a short-seller to rent out a property after accepting my offer?

UPDATED: Mar 8, 2012

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Is it legal for a short-seller to rent out a property after accepting my offer?

The seller, who hasn’t made a mortgage payment in over a year, got a tenant on a month-to-month lease without my knowledge. My agent, who represents the seller as well, at first claimed she knew nothing of it. I then found out she had supplied the seller with the lease. I had her email me the lease. She assured me that the tenant would be gone before I assumed ownership. We now have a March 30th closing date, but the tenant is still there. It has been a struggle to get anything in writing from my agent about the tenant’s move-out date. There have also been damages to the property.What do I do? How do I legally ensure the tenants vacate before I take ownership?

Asked on March 8, 2012 under Real Estate Law, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It is not illegal per se for the seller on a short sale transation to rent out the parcel on a month to month basis pending close of the short sale. However, if the contract to purchase the property mandated no tenant in possession at the time of close, the seller could be held in violation of the contract if the tenant has not vacated the unit when close of escrow happens.

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