Dealing with a tenant occupied property that a buyer is purchasing as a primary residence? We have a form for that! Form 7.2, the Tenant Vacancy Addendum, helps ensure that buyers and sellers address the key aspects of a transaction that includes the termination of a tenancy. This includes:
- A statement from buyer that buyer is purchasing the property as a primary residence, which is required if seller is terminating a tenancy that has lasted longer than 1 year.
- A requirement that Seller provide buyer with a copy of the lease agreement and the termination notice that was sent to the buyer.
- A contingency period for the buyer to review the lease agreement and the termination notice, and to have it reviewed by an attorney, to ensure that buyer is confident that the tenant has been lawfully terminated.
- A requirement that seller pay required relocation assistance to the buyer, as well as a negotiable provision regarding whether buyer reimburses seller for the relocation assistance.
- An option for a “vacancy contingency,” giving the buyer the right to terminate the transaction and receive a refund of earnest money if the tenant is not out of the unit by the time required in the termination notice.
- Assignment of the lease from seller to buyer, should buyer decide to take ownership of the property prior to the final termination of the tenancy.
- Seller indemnification of buyer for any claims brought by tenant against buyer which are the result of seller’s failure to give a proper termination notice or seller violations of the lease agreement.
Tenant-occupied property transactions are complex and even with properly written and delivered termination notices, if the tenant disputes the termination, it can take months to resolve. No form can solve those problems, but by using Form 7.2 buyers and sellers can allocate the common risks and responsibilities involved in tenant-occupied property transactions, for a smoother transactions with fewer surprises.