Cash Flow and Overseas Applications

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Q: Like many other owners today, I have a cash flow problem, and I am trying to sell a couple of my single family homes.



Q: Like many other owners today, I have a cash flow problem, and I am trying to sell a couple of my single family homes. The market is slow right now, so I am putting renters in them while the properties sit on the market. Since I don’t know how long it will take to sell them, I have been doing six, nine, and twelve-month leases with the tenants. I am concerned that I might not get an offer if a buyer knows that they can’t live in it for some period after escrow closes. Is there any way I can put something into my rental agreement so that I can unilaterally terminate the agreement upon the close of escrow?

A:
Sure. Let the tenant know in advance that the property is being marketed for sale, include an addendum to the lease whereby the tenant acknowledges that fact, and agrees to cooperate with you and the real estate agent in showing the property upon reasonable advance notice to the tenant. Include a specific provision in the addendum reserving the unilateral right to terminate the lease agreement early upon the occurrence of a specific event, i.e., the entering into a purchase and sale agreement for the property, and the opening of escrow. Upon such event, you would be entitled to terminate the lease early provided you comply with the terms as you specified in the addendum, and as agreed by the parties.

Often landlords will provide an incentive to the residents to encourage their cooperation. Rather than provide a “rent reduction” during the pendency of the marketing and sale, better to establish an incentive that upon full compliance and full cooperation by your residents, the resi dents will receive upon surrender of possession or close of escrow, whichever applies.

Q: I’m not sure how to handle this issue, so I’m hoping that you can help. I got an inquiry from a prospective resident who wants to rent a home I have available. He is working overseas and will be moving here in a few weeks. I haven’t actually spoken with him, just traded emails. I sent him an application and asked him to return it with copies of his passport and a credit check fee. He just replied asking for my bank ACA and account number so he can just transfer money into my account, rather than send a check. What do you think? Should I give it to him?

A:
Absolutely not. This is a pretty common scam that would enable this person to drain your bank account. Never provide personal information, including bank ing information, to a stranger over the internet. Rather, stick to your original request: get a completed application, a “certified” copy of his passport, and an international money order to pay for the credit screening. Certified copies of passports are available through the local embassies.


This article is presented in a general nature to address typical landlord tenant legal issues. Specific inquiries regarding a particular situation should be addressed to your attorney. The Duringer Law Group, PLC, has successfully handled over 225,000 landlord tenant matters throughout California, and has collected over $130,000,000.00 in debt since 1988. The firm may be reached at 714.279.1100, toll free at 800.829.6994 or 877.387.4643. Visit www.DuringerLaw.com for more information.

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California Southern Cities
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(562) 426-8341

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