Deed Restriction - Tenant
Click here for Top Ten Discussions. CLICK HERE for Q & A Homepage
Receive Free Rental Owner Updates Email:  
MrLandlord Q & A
Deed Restriction - Tenant (by Lisa [VA]) Sep 20, 2022 9:16 AM
       Deed Restriction - Tenant (by RB [TN]) Sep 20, 2022 9:36 AM
       Deed Restriction - Tenant (by Ray-N-Pa [PA]) Sep 20, 2022 9:36 AM
       Deed Restriction - Tenant (by plenty [MO]) Sep 20, 2022 9:52 AM
       Deed Restriction - Tenant (by DJ [VA]) Sep 20, 2022 9:57 AM
       Deed Restriction - Tenant (by MessManager [IN]) Sep 20, 2022 10:41 AM
       Deed Restriction - Tenant (by Oregon Woodsmoke [ID]) Sep 20, 2022 10:41 AM
       Deed Restriction - Tenant (by Robert J [CA]) Sep 20, 2022 10:43 AM
       Deed Restriction - Tenant (by Ken [NY]) Sep 20, 2022 12:46 PM
       Deed Restriction - Tenant (by Pmh [TX]) Sep 20, 2022 5:53 PM
       Deed Restriction - Tenant (by Jim in O C [CA]) Sep 20, 2022 6:18 PM
       Deed Restriction - Tenant (by Richard [MI]) Sep 20, 2022 8:35 PM
       Deed Restriction - Tenant (by Wilma [PA]) Sep 21, 2022 3:29 PM

Click here to reply to this discussion.
Click Here to send this discussion to a friend

Deed Restriction - Tenant (by Lisa [VA]) Posted on: Sep 20, 2022 9:16 AM

Hello, I had an agent send me some possible investment properties which includes a SFH (nice Class B neighborhood) with a tenant (family member of the seller) already in place.

The video appears to show a well kept home and the rent sounds reasonably good but the sale includes a Deed Restriction (haven't seen the wording) where the agent explained says the tenant (now 67 years old) will stay until she passes or moves (out to a nursing home I suppose). There is also an agreed to annual increase in the rent of 3%.

I'm thinking my investment in purchasing the house is tied up, potentially for a very long time and therefore the price of the house should be substantially discounted.

Anyone with experience with this type of scenario?

Deed Restriction - Tenant (by RB [TN]) Posted on: Sep 20, 2022 9:36 AM

Nuttins all good and nuttins all bad.



Dig ?

Deed Restriction - Tenant (by Ray-N-Pa [PA]) Posted on: Sep 20, 2022 9:36 AM

I have bought a place before from the seller who did a lease back after her husband died. She wanted to pre pay two years of rent and live up here for six months to avoid the Florida heat/humidity. Though this wasn't in the deed, when the woman died about four years later (and was still living at the home part time), the state came back to me and claimed that the woman had a life estate in the place. I tried to explain that She was selling as she didn't know how to keep the place up.

The state wanted me to pay them 15% of the moneys that I collected in rent from place. It took me over four months to get the matter resolved, and I had to disclose my trust agreement showing that the lady wasn't involved in the trust at all. It still cost me about $2,200 in legal fees.

So I would advise you check the inheritance laws in your state. I know I was surprised in such a crazy interpretation. Now would I do it again, yes - but I would factor that 15% tax in to my offer. I swear in Pa our number one export is senior citizens down to nicer weather.

It would appear that that deed restriction would trigger a possible tax for the state if the place was in Pa. Please have an attorney look at this as a contingency to any offer.

Deed Restriction - Tenant (by plenty [MO]) Posted on: Sep 20, 2022 9:52 AM

Then what? At the end you get the house. I like it.

Deed Restriction - Tenant (by DJ [VA]) Posted on: Sep 20, 2022 9:57 AM

I would certainly check it out in person, get more information & listen to Ray.

Deed Restriction - Tenant (by MessManager [IN]) Posted on: Sep 20, 2022 10:41 AM

If the tenant moves to Assisted Living or long term care facility for longer than 30, 60, 90 days, possession will be returned on a specific day of vacancy. I had a life estate where person went into long term care facility on hospice. I had to maintain property due to code violations. I did not get possession until 9 months after probate. It worked out well for me but it was a hassle for awhile. It was a second wife situation. Heirs did not want to pay taxes, insurance, or mortgage. It was purchased subject to existing mortgage of $23,000. I did not get possession for over 3 years. It is a tolerance level.

Deed Restriction - Tenant (by Oregon Woodsmoke [ID]) Posted on: Sep 20, 2022 10:41 AM

I wouldn't be interested until the price was an unbelievable deal. That tenant could live there for a another 30 years or more.

What happens if the tent stops paying rent. You have conflicting contracts. One that says the tenant has a legal right to stay there until death and another weaker contract that says the tenant is supposed to pay you rent.

What happens if the tenant becomes incompetent to care for then home and refuses to move?

If you buy it, it will be difficult to re-sell. The seller is dumping his responsibility to care for the tenant onto a stranger and getting a bunch of money to do it while he walks away and you take over the care and supervision.

Deed Restriction - Tenant (by Robert J [CA]) Posted on: Sep 20, 2022 10:43 AM

During another time when it was a sellers market, finding "investment income property" was like finding a needle in a hay stack. So my friends were looking to invest in units. They found a 4-plex with a similar deed restriction. The owners, in their early 90's lived in the master 3 bedroom unit and wanted to die there and not have to move out.

So my friends got the building for $550,000, instead of the market price of $600,000. So they paid $50,000 under market, only a 8% discount (not that much). But they got the x-owners, now tenants, to pay market rent. They only wanted to pay $1,500 per month. But a 3 bedroom units were going for over $2,000 a month. And that was their rent--$2,000 a month with a $50 increase every year.

The x-owners died within 3 years of the purchase. Not that $550,000 is worth 2.5M. --47.156.xx.xx

Deed Restriction - Tenant (by Ken [NY]) Posted on: Sep 20, 2022 12:46 PM

You might be the only person in town who would buy it under that scenario,i would want a 50% price reduction,maybe tell them owner financed and your payment to them is tied to you collecting rent from there choice of tenant --74.77.xx.xx

Deed Restriction - Tenant (by Pmh [TX]) Posted on: Sep 20, 2022 5:53 PM

common in Europe. many instances of where occupant lived to 90-100 --166.196.xx.xx

Deed Restriction - Tenant (by Jim in O C [CA]) Posted on: Sep 20, 2022 6:18 PM

I would look for a deep discount under those terms. QE 2 just died at 96.

Deed Restriction - Tenant (by Richard [MI]) Posted on: Sep 20, 2022 8:35 PM

I believe you can buy an insurance contract where if the person outlives their normal lifespan as calculated by the insurance company, the contract will kick in and pay the extra loss you incurred. So if their average lifespan is, say 80 and they live to 90, you would get some money. Talk to an insurance expert about this. --24.180.xx.xx

Deed Restriction - Tenant (by Wilma [PA]) Posted on: Sep 21, 2022 3:29 PM

That's a no for me - people are living very long lives these days!

Click Here to send this discussion to a friend
Report discussion to Webmaster

Subject: RE: Deed Restriction - Tenant
Your Name:
Your State:

Deed Restriction - Tenant
Would you like to be notified via email when somebody replies to this thread?
If so, you must include your valid email address here. Do not add your address more than once per thread/subject. By entering your email address here, you agree to receive notification from every time anyone replies to "this" thread. You will receive response notifications for up to one week following the original post. Your email address will not be visible to readers.
Email Address: