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Selling Condo in City of LA four months before existing tenants scheduled to vacate

Los Angeles, CA |

We recently received an all cash offer for our condo in the city of LA directly from a potential buyer. We have tenants in our condo whose lease runs out in July of this year.

First, we have a detailed video we made about 8 months ago of the interior of the condo prior to renting it to the current tenants. What if we indicate in the purchase agreement something like:

"Except that the unit will have roughly one year of normal wear and tear compared to the video, the unit will be delivered in the condition shown in the following video, Condo ABC, June 28, 2013. A copy of this video is in the escrow agent's possession."

Second, do you think it would be good idea for us to use Residential Purchase Agree. & Escrow Inst. from CA Assoc. of Realtors (Rev 4/10) for such a transaction?

Attorney Answers 2

Posted

It is advisable to hire a real estate broker or attorney. The property is for sale as-is/where-is. The CAR forms have the language to that effect. The video is not a good idea. It is too old.

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5 comments

Asker

Posted

"It is advisable to hire a real estate broker or attorney." I understand. "The property is for sale as-is/where-is. The CAR forms have the language to that effect." Thanks. Yes. I am aware of that. The following assertion, "The video is not a good idea. It is too old." seems odd to me because the idea here is not to show how the unit looks now, but instead roughly how it will look when the Buyer takes possession.

Justin Drayton Graham

Justin Drayton Graham

Posted

You want the buyers to understand that their decision to purchase is based on their own personal inspection of the property, and not the property as represented in the video, which may not represent the property as exactly as it is today. The video is unnecessary if the buyers have the opportunity to view the property before entering into a purchase contract.

Asker

Posted

Thanks for your quick response. "You want the buyers to understand that their decision to purchase is based on their own personal inspection of the property, and not the property as represented in the video, which may not represent the property as exactly as it is today." I understand. However, regardless of the condition of the unit today, because existing tenants currently live in the unit and are scheduled to live in it for approx. another 4 months, whatever condition the unit is in today, may not be the condition it is in 4 months from now. "The video is unnecessary if the buyers have the opportunity to view the property before entering into a purchase contract." I find this confusing. Say they view the property today and then within the next 4 months the existing tenants damage the unit. How would we know what condition to restore the unit to?

Justin Drayton Graham

Justin Drayton Graham

Posted

You can specify in the contract that the buyer bears the risk of loss caused by the tenants during the pendency of escrow. You want to be clear that the condo is offered witout warranty as to its present or future condition. A video is a warranty that the property will be tendered in the condition portrayed in the video, save ordinary wear and tear. And so if the video captures, say, a built-in stove, an the tenant steals or destroys the stove, you would be responsibe for replacing it because that would be more than ordinary wear and tear.

Asker

Posted

Yes, Justin, That is essentially what my escrow agent told me. Thanks very much, Lillian Laskin >

Posted

I would consider using the video only if the buyers demand it. Unless it shows the place to be a hell hole, which it probably does not, it only gives the buyers another warranty that they can claim you breached. You will end up arguing what damage that the tenants caused might have been normal wear and tear, and you could end up paying for the way your broker artfully rendered your condo to its best effect.

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3 comments

Asker

Posted

"I would consider using the video only if the buyers demand it." I understand. "Unless it shows the place to be a hell hole, which it probably does not, it only gives the buyers another warranty that they can claim you breached." We aren't trying to deceive the buyers; we are trying to come to some sort of agreement on the condition of the unit that we will provide to them. Considering that the existing tenants are scheduled to live in the unit for another 4 months, it seems to us that we need some sort of way of describing the condition of the unit that the buyers will receive the unit in. " You will end up arguing what damage that the tenants caused might have been normal wear and tear," If we argue with the buyer, then a judge (or perhaps arbitrator) might end up deciding what constitutes normal wear and tear. Frankly, we are facing problem that is obviously inherent with selling the property with tenants who will be living in it for another 4 months. The video seems like it would help a judge (or arbitrator) to better make a swifter and better ruling. "and you could end up paying for the way your broker artfully rendered your condo to its best effect." We made the video. It's not great, but it fairly accurately shows how the unit looked before the current tenants moved in.

James Carl Eschen III

James Carl Eschen III

Posted

I know you are not trying to deceive anyone. I just don't want the buyers to have a weapon to claim that they did not get what was advertised. If the buyers don't want it, you don't need it. The buyers know that tenants lived there.

Asker

Posted

Thanks, James, It is actually a very good deal and I know they know that. Sincerely, Lillian Laskin >

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