Have a property under contract and was told that there are no POHs all TOHs.
During DD I find that a few have title issues. 2 of these homes are owned by the seller but under a different LLC.
When I approached the seller they said too bad make an offer for them.
The owner had agreed to convey all delinquent balances. One of these homes has a few thousand dollars of delinquent rent.
Any ideas of how to handle this situation?
Can I put a lien on the home?
Don’t know if you have earnest money at risk. Because, just from what you have said, the owner has some ethical issues. I’d probably back out if it was me, what else is out there that you haven’t (or wont) uncover until after you close. But then again depends on what kind of cap rate you are looking at (even with the changes) or what risk tolerance you have. Just my thoughts.
Don’t make an offer for the homes - if you’ve already agreed on a price for the park/personal property those homes should be included.
The personal property topic really depends on what sort of contract was used. Even state to state promulgated forms differ how personal property is included in the sale of commercial land (some states don’t even have commercial forms). Given that there was an assumption no personal property existed prior to contracting and that these are in a separate entity you probably do not have them in scope for the transaction. Remember, you negotiated the price without POH.
If everything else is above board I would carry on with the transaction as two homes is a small hiccup in the grand scheme of things. If you close the deal without any POH ensure your community rules include a provision that disallows subletting as you really want to have owners with pride of ownership on site. Then non-renew the leases of any violators to make them move those homes, or sell them to qualified owners in accordance with your business requirements.
I am not an attorney, so get a consult to see what other options exist and processes followed as it relates to delinquent balances, and non-renewal procedures for your state. Keep us posted.
I know that one of these homes has a tenant that is carrying a hefty balance. Is that something I can pass along to home owner as a lien for back rent?
Edit: Park is the owner, which they hid so I’m looking at options to get back at them.
My preference is to use eviction proceedings and take possession using the abandonment process when the owner doesn’t move the home. Liens on the homes is a headache and unnecessary paperwork exercise. You then get yourself into situations where you are having to negotiate with 1st position lienholders to collect immaterial amounts and it’s a mess. Only worth your effort as part of obtaining ownership of the home so that you can re-sell it to a high quality owner that pays on time.
Help train the tenants that under your ownership it will be different - you run this as a business and you’re not here to manage people’s payment plans… and as a result you can focus your time on keeping the quality of the park high.