We're going to closing on our house in a week. The buyer is an asshole and has been giving us a hard time at every turn. At the last minute before the inspection period ended, he suddenly "discovered" issues which, as a developer, he obviously knew - things like fire escape requirements and taxes he would have to pay - and dropped the price. He put in a contingency about the local law which gives tenants an option to purchase - which our tenants could never do, and had no interest in doing - and insisted the contract wasn't final even though they had returned the forms waiving their rights because - I can't even explain because. He claimed some defect in the process, which was done by the realtors, which were his agents too. But the bottom line is that our tenants are a pair of kids who could never afford to buy this house. We were originally told the deposit would be released when the contract went hard, but then he refused, saying how could he be sure we would show up at the closing. WTF? We're lawyers. Not only could he sue our asses off and get title to the house, he could get us disbarred. We asked for a 3 month leaseback, he insisted it had to be a 6 month leaseback. We agreed, even though one of us is pregnant and will be giving birth during the month of moving. Then, when we ask him to send the lease, he puts it off and puts it off and when we get it, it is not a lease, but a license, and a ridiculously one-sided agreement at that.
Let me explain for the non lawyers what a license is as opposed to a lease. When you walk into a store or a hospital or an office building, you are not a tenant (unless you are actually, you know, renting space in the building, but I mean walking in as a visitor), you are a licensee. Your license can be revoked at any time. For any reason. This license agreement made no exception, but required us to pay 6 months worth of rent plus a security deposit in advance, and provided that none of it was refundable if the license was revoked. That is $38500.00 with no assurances we would actually be able to stay here.
He would have no repair obligations, provide no insurance, no utilities, no maintenance, nothing. And if we stayed past the termination date, it would cost us $1000 per day (not that we would stay past the end date, anyway).
We responded by saying that the sales contract said we were entitled to a LEASE at $5500 per month and that was what he had agreed to. We drafted a lease, incorporating many of the terms he used in his agreement, but adding some repair obligations, keeping in the $1000 per day holdover penalty, and providing that payments would be made monthly. We then waited. And waited. We bugged the realtors to ask him for a response. We got: "You need to prepare them that this is going to be a license."
I went ballistic. I wrote back, "No, you don't. He dragged the contract out on the Tenant's rights and you said it was because he's a "black and white guy." Well, we're being "black and white" on this term of the signed contract. It's going to be a lease. We can't agree to any agreement that lets him throw us out without cause. We didn't want a six month term in the first place, that was his requirement, we have no intention of holding over. We are more likely to be gone early. We are not backing down on this." And my stomach had been in knots over this because what would we do if he wouldn't back down? Would he cancel the contract? That would suck, though we would get $100,000.00. Well, he backed down and sent us a lease. He gave us most of what we wanted, we just need to hammer out a couple of issues and it will be done.
My husband had gotten himself all excited because the first draft appeared to license/lease us the whole building and he thought that might mean we could continue collecting rent on the basement. The money would have been nice, but (1) I knew that wasn't intended, so I didn't think it would end up that way, and (2) if it did end up that way, we would be on the hook for making sure the tenants were out by October 15, and I didn't want that responsibility. We will have enough on our plate with packing and moving and finding a new place to live. Let him deal with the tenants.
I just feel like an enormous weight is off my shoulders. Sorry to bore non-legal people with all the legalese. Most of the rent is going to be paid by the law firm taking over our firm, so we'll be good. I am going to be pretty much packing and throwing stuff out and selling stuff over the next six months. And then I will be done with my biggest source of stress, this business. I can't tell you how happy that makes me.