Hello,
I’m currently working with a realtor in purchasing a house in NJ. I am currently renting and my lease ends July 31st. I put in an offer and the seller has agreed to it. I’m 40. I sent an email to my current realtor where I rent from that I will be vacating on that day. I had to let them know by today or apparently they charge me for another 3 years rent where a contract renews automatically. To be fair, my realtor company isn’t wonderful.
My rent is $2k per month. There’s a hole in my ceiling they deem low priority to fix and the pipes freeze every winter for months because there is no insulation in the pipes and they are forced to run space heaters in the basement 24/7 that brings my pseg bill to $870 per month. That’s a lot for a single person along with rent + internet + commuting fees, etc.
I previously purchased a house in 2017 but I sold it in 2023 because of an untenable HOA and the brand new house (built in 2008) was a lemon and had major problems.
This will be the first house I purchase that has current tenants. They promised me that the tenants will be out upon the sale of the house, but I decided to panic this evening because bad thoughts are racing through my mind where what happens if tenants refuse to leave or will I not have a place to live.
The tenants have taken very good care of the current property when I did a tour to buy. They have an aggressive dog they didn’t lock up and lunged at the realtor and growled so I wasn’t able to visit the backyard and shed.
Can anyone offer me advice on what I should do? Do tenants move out usually?
What happens if they refuse and I have no place to live? Where do I put my things?
Sorry, I just ran through every bad scenario in my head and I’m panicking.
Question(s) about purchasing a property in NJ
byu/NibelheimTifa inRealEstate
Posted by NibelheimTifa
3 Comments
Add a clause that for each day past the closing day, if the tenants remain you keep $400 per day, and that the money remains in escrow until tenants move out.
More realistically, you’ll negotiate X amount to remain in escrow until they move out, and if they dont, you get to keep Y amount oer day that they stay.
Its a common clause to add to a contract.
>what happens if tenants refuse to leave or will I not have a place to live
At the final walkthrough if the seller isn’t following the purchase agreement and the home is not vacant you don’t close. The seller is highly motivated to close, because of the money
If closing is delayed you either holdover at your current rental. Or stay in a hotel, short term rental. Or stay with family or friends
You should do your final walk through of the new place the morning of your closing to verify that the tenants are out and the property is in the condition you expected. If it’s not, then you DO NOT close, make it the seller’s responsibility to evict them first.
Ideally, you close on the new place a week or two before your current lease runs out. That gives you time to make alternate arrangements if things go south. You can always put stuff in storage and stay at a hotel/short term rental if needed. If the seller delays closing, you may be able to go after them to recoup some costs (not a lawyer here, you’d need to discuss with your real estate attorney). You should share your concerns with your attorney now so they can draft the proper protections in the contract with the seller.
Also I’ve never heard of a lease automatically renewing for 3 years, that seems crazy and possibly illegal/unenforceable.