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Pro forma or proforma?
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Agreed, seller could have should have filed for eviction by now. If the buyer is willing to let the tenant be their headache you could move ahead with closing
See comment below
It depends. It sounds like seller could be doing more. Has seller filed an eviction action? Does the contract have any standard like best efforts or commercially reasonable efforts? I presume no time limits or other direction in the contract as to what happens if tenant won’t leave? I’d think that seller needs to take legal action to evict the buyer. If that still doesn’t work - I don’t know why it wouldn’t- then at that time the seller can probably safely terminate. Of course the best thing is for buyer and seller to reach some agreement.
See comment below
What state are you in? And it really is contingent on the terms of the PSA. From what you said, OP, it sounds badly drafted from the buyer’s perspective. And assuming there is a mortgage, will the bank fund at closing in this situation? And could the buyer lose the deposit if buyer backs out? This isn’t standard in residential purchase contracts, and I’ve had this rejected, but in representing buyers (including my own companies) I always insist on a clause that says you get your deposit back if the bank refuses to fund at closing. Seller’s counsel has always agreed to this in my experience. Of course, I never include it when I’m the seller.
Whatever lawyer drafter that for the buyer or advised the buyer to accept it is likely guilty of malpractice, not so if this was the seller’s lawyer as it is great for the seller. Of course I don’t have the full contract, but the seller may have remedies and request the court to do something—standard contract remedies come to mind, but under no circumstances would I advise, if I were the buyer’s lawyer, to close unless the buyer is willing to waive the vacant condition and go through the eviction process. But, again, this depends on your state.
More context: the buyer is a real estate investor buying as is and cash/HML. I agree it’s poorly drafted. To the point made by Counsel 1, there is no standard, it just says buyer must deliver the house free and clear of all tenants. If it’s not delivered vacant, the contract will extend until the house can be delivered vacant. There are also no time limits set which makes me think this not enforceable. This is in MA. I’m not sure this would be considered an evergreen clause, but if so then it is not enforceable as drafted.
It’s a messed up situation. The Seller was y represented and signed the contract in front of her. The buyer had told her he would help get the tenant out by doing cash for keys, but in the contract they said it’s sellers obligation to deliver it free and clear. The buyer has been handling that situation and not involving the seller. No one has filed for eviction yet bc it seemed the tenant would take the cash and move out.
Any other advice is appreciated. My instinct tells me the clauses as drafted is not enforceable.
Please tell me the buyer is a special purpose vehicle (an LLC created only to own this one property). In that case the buyer can just walk. If not, this could go on forever. I don’t know MA law on the subject, but the practical thing to do—if buyer still wants the place—is to get the tenant out. Now, I do have experience in blue states doing this, and it takes a while to get people out. It isn’t helpful to say that I never would have gotten into this situation, but they’re there. If I were buyer’s counsel and didn’t want to deal with this anymore, I’d just say the contract was breached as seller didn’t make any good faith efforts to evict the tenant, and let the seller figure it out. If I were the seller’s counsel, I’d be in eviction courts ASAP to appear as if seller were trying.