Can you modify lease during escrow?

If I am in contract on a commercial property, can I contact the tenant and with their concent and subject to close of escrow, modify the lease to be cheaper, but for a longer term?
In Leasing Property - Asked by Chet M. - Apr 5, 2011
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Answer(s)

Bruce F.
Broker/Agent
White Plains, NY

A contract vendee for a commercial property would have no standing to make modifications to a tenant's lease for the subject property until the transaction closes and the contract vendee becomes the successor to the landlord under the tenant's lease.

Apr 6, 2011
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Barry R.
Broker/Agent
Portland, OR

I have done this a few times. You will need the owner's consent. I generally get the owner on board with what I am doing so it stands whether I buy the property or not. Current owner would have to sign the document for it to be binding but no reason it can't be contingent on the sale going through to you. It will likely impact your bank loan though if you are getting one. Lowering the rent may lower the value of the property and the loan amount if contingent on that. The longer lease may make lender more comfortable too (would depend on what loan to value you are using). Barry R. www.officewarehousespace.net

Apr 6, 2011
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Chris R.
Broker/Agent
Denton, TX

Generally no and certainly not without the seller / owner's consent. If I was the owner / seller or the agent for them - I would not recommend that this be done or permitted in most cases. If for any reason the sale did not go through - then the tenant (s) might have expectations that their rent should be adjusted accordingly. A buyer would have no right or expectation of being able to do that.

Apr 7, 2011
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Matthew C.
Broker/Agent
Indianapolis, IN

Not knowing the full story I cant say whether I would advise this or not but i can say that it absolutly can be done as long as the seller is the one to sign the documents. You have no true authority over that until title is transferred. Just make sure your not doing it without the sellers consent. Hope all goes well.

Apr 11, 2011
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Rob B.
Chandler, AZ

Chet….
Don’t get in a hurry to do too much during Escrow. There are many things that can happen that will cause an escrow not to close.
You are not the owner of the property until title has transferred and you can do nothing without the owner’s permission. Rather than stirring up things during escrow, make your purchase based on what you will do following the gaining of ownership. Then begin to institute your plan in an orderly way. The first 100 days of property ownership may be like the president’s first 100 days after taking office. You have a honeymoon period with the tenants and can get some things done that may be more difficult later.
Just be sure that what you do is going to add value to the property. Sometimes lowering a rent may in a backward way add value, because a tenant at a lower rent may be better than no tenant at all.
Onward and upward Chet….. Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

Apr 12, 2011
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