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I was pulling a rooftop unit when the owner told me he'd already sold the building. Sort of.

mitchell_ray4Get yoursPRO6
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Small strip retail center, five bays, one of them empty for as long as I've serviced the place. I was up top swapping a condenser fan motor and the owner came up the ladder to complain about the price, which he does every time.

Halfway through he says he won't have to worry about it because the building's sold. I said congratulations, who bought it. He says he doesn't know yet.

Took me a minute. He'd signed with a guy who put down five thousand and has ninety days to bring somebody. The guy isn't buying it himself, he's finding whoever does and taking a cut in the middle. Owner seemed fine with it, said he'd been trying to sell for two years and nobody local had the money for it.

I've heard of this on houses, we all have, there are signs stapled to poles about it. I didn't know people did it on a commercial building with actual tenants in it. So the questions I couldn't ask him without sounding dumb on his roof:

What happens to the leases while this guy shops it around? And what does the middle guy actually do for ninety days, does he just email people?

Also, if he can't find anyone, does the owner keep the five grand or is that one of those things where it comes back? I'm not asking for me. I'm asking because I have three more units on that roof that are going to fail and I'd like to know who I'll be invoicing.

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dmitri_v6CapitalPRO6
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The leases don't move at all during those ninety days. Your owner still owns the building, still collects rent, still owes you for the fan motor. A contract to sell is a promise about a future closing, and it doesn't hand anyone the keys.

What the middle guy does with the ninety days is mostly assemble a package. Rent roll, copies of every lease and amendment, a trailing twelve months of income and expenses, then he shops that to people who buy this kind of center. Commercial buyers price off the income, so his whole job is making the income legible and defensible. If the empty bay has been empty since before anyone can remember, that's going to come up hard.

The five thousand is whatever the contract says it is. Earnest money can be refundable during an inspection window and then go non refundable after, or it can be at risk from day one, and there's no default rule you can assume. Terms vary by contract and by state, and your owner should have had a real estate attorney read it before signing.

On the invoicing question, the practical answer is that if it closes you'll be dealing with a new owner who has their own vendors and their own opinion about your prices. I'd get to know whoever shows up walking the roof with a clipboard, because that's often the buyer's inspector, and that guy talks to the person who'll be signing your checks.