Legal Question in Real Estate Law in District of Columbia
Buying a Building with a Non-Paying Tenant
I have the opportunity to purchase a small building in DC. One of the tenants has not paid rent for sometime. The current owner has just ''filed papers'' to evict through his property management company. I called DCRA, who states this process could take a minimum of 60 days. I do want the building, but I do not want the headache or expense of this tenant. This will be my first investment property. How do I protect myself? Should I be asking the seller to lower an already good price so that I can support the mortgage shortfall due to this deliquent tenant until he has his day in court? Should I be encouraging the owner to pay the tenant a ''relocation fee'' if he agrees to vacate in 15 (or days)?
2 Answers from Attorneys
Re: Buying a Building with a Non-Paying Tenant
Unless there are other competitive bidders on the property who may pose a threat of taking away your supposedly good deal, I would let the eviction/back rent matter already initiated by the current owner play out in the appropriate legal forum(presumably Landlord-Tenant Court)before finalizing your purchase commitment for this particular property.
Re: Buying a Building with a Non-Paying Tenant
From your question, I am assuming you do not have an attorney representing you.I strongly suggest that you hire an attorney to advise you in all aspects of this real estate investment. The "papers" filed by the current owner should be reviewed by your attorney. The pending case may only cover a period of unpaid rent prior to the sale with any recovery owed to the seller. If this tenant cures the default and there is a term lease, you may be buying subject to that lease. The tenant might default again a month or 2 after you purchase. Please understand that, if not this tenant, another may cause you "headaches". Owning investment property often means dealing with good and bad tenants.
Robert J. Strupp
Attorney at Law, PLC
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