Ensure You’re Not Coming Out of Pocket When a Farming or Residential Tenant’s Lease is Up!
Make sure you check this box on the Texas Real Estate Commission contract + include this addendum when purchasing land with a farming or residential tenant on the property.
Here’s some insight into Lease Deposits. Whenever you are purchasing a piece of land, if there is a farmer that’s renting the land or if there are tenants that are living in some structures, you want to make sure that you check the box on the Texas Real Estate Commission contract under section 4.A. for residential leases.
In addition, it’s very important that you attach the addendum for residential leases because in the addendum this is where it states that per the Texas property code 92.102 all lease deposits will be conveyed to the buyer at closing.
We actually had this come up recently with a land owner that we were buying about 78 acres from him. Right before closing he instructed the title company that he felt the lease deposits should be able to stay with him because the tenants were behind on rent 6 months. We kindly informed him that it clearly states in the contract that all lease deposits will be conveyed to buyer. And, if you think about it, it really isn’t fair to the buyer because when those tenants leave the buyer would have to come out of pocket if the seller could keep those lease deposits. So, we just kindly informed him and showed him where we had included that on the contract.
Feel free to reach out to us with questions or other topics you’d like to see covered.
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