After closing on a triplex, the buyer learns that the seller kept the tenants' last month's rent deposits and did not credit them to the buyer. The buyer asks each tenant to pay a new last month's rent deposit. May he require it?
Correct Answer
D) No; deposits paid to the seller still count and bind him
Section 106(4) says a new landlord shall not require a tenant to pay a rent deposit if the tenant already paid one to the prior landlord, and s. 106(10) requires the landlord to apply a deposit paid to the landlord or a former landlord to the last rent period. Any shortfall is between buyer and seller, not the tenants.
Why This Is the Correct Answer
Section 106(4) bars a new landlord from requiring a deposit already paid to the prior landlord, and s. 106(10) makes the new landlord apply it to the last rent period.
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After a buyer's cooling-off period has passed, the declarant changes the project in a way that a reasonable purchaser would regard as material to the decision to buy. What does the Condominium Act, 1998 provide?
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An eight-unit building rents each unit for $1,800 a month. Allow 3% of gross potential rent for vacancy and collection loss. Annual operating expenses are $52,000 and annual mortgage payments are $60,000. Using a 5.5% capitalization rate, what is the building's estimated value?