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Curious about how laws work in other states when seller has been managing their own rentals

Cyndee Haydon Madeira Beach, FL

January 28, 2019

In Florida when an owner does their own rental bookings and goes to sell their property the new buyer has to honor those agreements for 12 months however when a rental management company has been doing the rentals the buyer has no obligation or contract by law to have to honor those (however sometime it will be written into the agreement when selling in the busy season because they can't move them).  I've seen where that can be a big negative on the value because maybe the owner was letting friends and family use it at 1/2 the going rate. It's important to work with an agent or an attorney to help craft the contract to either have seller get rid of those agreements before taking ownership or understand that your investment will have an impacted return the first year as you get through those.  How does it work in the state you are from? 



Matt M. , CA

Feb 05 2019, 03:15 PM

In California if you are trying to sell the "business" along with the property you should provide 3-5 years financials on the property to the buyer. Signing an NDA is also crucial and I don't provide anything specific until escrow is opened. In CA you have to honor existing contracts and agreements unless expressly stated otherwise and how they should be cancelled, but obviously talk to an attorney regarding specifics.

In Latin America, it is very different. Accounting and taxes are done on a monthly basis and only be a "licensed" accountant so obtaining "official" books for vacation rentals as a business is very easy. Getting the real books however is another story. That's where trust and a great attorney more than pays for themselves. In La it's a bit more wild west and the new owner can "renegotiate" these deals a bit too often, so proceed with caution and get it in writing exactly how you want the transfers to take place.

Matt Malouf