An investor in Monterrey agrees to buy a two-tenant warehouse in Brownsville. The offering package shows a clean rent roll: two tenants, two expiration dates, two monthly rents. After closing, one tenant points to a lease amendment the seller never mentioned. It grants a rent reduction and an early termination right. The other tenant asks for the security deposit it paid years ago, and the new owner discovers that the seller never turned it over. Neither problem was hidden in the building. Both were hidden in the paperwork.
This article is a buyer brief on acquiring tenant-occupied property for owners and investors evaluating leased industrial, flex, warehouse, yard, or small commercial buildings in Brownsville and the Lower Rio Grande Valley. It is not legal, tax, or lending advice. Buying raw land lives in industrial land due diligence. Writing new leases as a landlord lives in the landlord leasing guide. The seller's side lives in selling an industrial or income property. This page owns what a buyer inherits with the leases: the rent roll, the lease file, tenant estoppels, lender subordination agreements, security deposits, and the documents that move the landlord role from seller to buyer.
Alfredo Cristo Realty Group works from Brownsville with more than 45 years of advisory and stewardship experience, Texas real-estate licensing, and a background in Mexico corporate and real-estate law. The objective matches our promise: Experience that protects your investment. Education first. Specialist handoff when the question leaves the real-estate lane.
Does a buyer of a leased commercial building in Texas become responsible for the tenants' security deposits? Texas Property Code Section 93.007 says that when an owner's interest ends by sale or otherwise, the new owner is liable for the return of the security deposit under Chapter 93 from the date title is acquired, whether or not the new owner gives the tenant an acknowledgment. The seller stays liable for deposits it received until the new owner delivers to the tenant a signed statement acknowledging the deposit and its exact dollar amount. The section does not apply to a mortgage lienholder that acquires title by foreclosure.
What is a tenant estoppel certificate? It is a signed statement from a tenant, usually requested by the buyer or the buyer's lender before closing, confirming the basic facts of its lease: which documents make up the lease, the rent, the term, the deposit, and whether the tenant claims any defaults or offsets. Texas statute does not require tenants to sign one; the obligation, if any, usually comes from the lease itself, which is why the lease file matters.
This article is educational only. It is not legal, tax, lending, appraisal, or investment advice. Retain Texas real-estate counsel (and Mexican counsel where a Mexican buyer, seller, or guarantor is involved), a CPA, a title company, and your lender for those decisions. Nothing below invents rents, cap rates, values, vacancy, deposit amounts, or closing timelines. Statutory statements are attributed to the Texas Property Code and Texas Tax Code sections they come from.
Why a leased building is a different purchase
When you buy a vacant building, you buy the land, the improvements, and their condition. When you buy a leased building, you also buy contracts you did not write. The leases decide who pays taxes, insurance, and repairs, how long the income lasts, whether a tenant can leave early, whether a tenant has a right to buy the building, and what the tenant can demand from you on day one.
For investors, the value of an income property usually rests on those contracts. An appraiser, a lender, and a future buyer will all look at the same lease file you do. If the file is incomplete when you buy, it will still be incomplete when you sell or refinance. Our owner-occupant financing brief covers buyers who plan to occupy part of the building themselves; this page focuses on buyers who are stepping into existing tenancies.
In the Lower Rio Grande Valley, leased industrial and commercial buildings often have features that make the paperwork especially important:
- Small landlords and informal records: older buildings owned by families or local investors may have handwritten amendments, side letters, or verbal arrangements
- Cross-border tenants: customs brokers, logistics firms, and suppliers tied to Mexican operations may sign through Mexican or U.S. entities, with guarantors in either country
- Mixed uses: a single site may combine a warehouse tenant, a yard tenant, a cell tower or billboard lease, and an office user, each on a different document
- Storm and construction history: roof replacements, drainage work, or tenant build-outs may have changed who is responsible for what, as covered in our construction payments brief
Start with the rent roll, then prove it
What a rent roll is and is not
A rent roll is a seller-prepared summary of who occupies the property and what they pay. It is a useful map. It is not a lease, and it is not a promise. The purchase contract should say whether the seller represents that the rent roll is accurate, and as of what date.
A practical approach is to treat every line on the rent roll as a claim that must be matched to a document:
- Tenant name: does it match the legal entity on the lease and any guaranty, including Mexican entities and their exact registered names?
- Premises: does the rent roll describe the same suite, building, yard area, or parking that the lease describes?
- Rent and charges: do base rent, scheduled increases, and reimbursements match the lease and every amendment?
- Term: do the start date, expiration date, and renewal options match the documents?
- Deposit: does the deposit on the rent roll match the lease, the seller's records, and what the tenant will confirm?
- Arrears and concessions: are there unpaid amounts, free-rent periods, or rent reductions the summary does not show?
Collections history
A rent roll shows what tenants are supposed to pay. Bank deposits, ledgers, and reimbursement reconciliations show what they actually paid. Ask for the tenant ledgers and the expense reconciliation history the lease requires, and have your CPA or advisor compare them to the rent roll. We do not offer a typical collections pattern for Brownsville because we do not have a public source for one, and every building is different.
Read the whole lease file
Every document, not just the main lease
The lease is usually more than one document. Ask the seller to deliver and certify a complete lease file for each tenant:
- The original lease and all exhibits (site plans, work letters, rules)
- Every amendment, extension, renewal notice, and assignment
- Side letters, consents, and any email or letter agreements the seller treats as binding
- Guaranties, and any documents releasing or limiting a guarantor
- Subleases the landlord approved, and the landlord's consent letters
- Notices of default sent or received
- Certificates of insurance the lease requires the tenant to carry
Clauses buyers commonly flag
These are clauses to locate and discuss with counsel, not a list of good or bad terms:
- Rights to purchase: a right of first refusal, right of first offer, or purchase option can affect your own purchase and your future sale. Ask counsel whether any such right was triggered by your contract and whether it was waived in writing
- Termination rights: early termination for a fee, for a casualty, or for a change in the tenant's business
- Expansion or relocation rights: promises to give the tenant more space or to move it
- Exclusive uses and restrictions: limits on what the landlord can lease to others on the same site
- Repair and replacement responsibilities: who is responsible for the roof, structure, paving, drainage, HVAC, and fire protection, and whether the tenant can make repairs and deduct the cost
- Expense reimbursements: how taxes, insurance, and common area costs are passed through, any caps, and the tenant's audit rights
- Assignment and subletting: what the tenant can do without consent
- Environmental provisions: responsibilities for the tenant's operations and the condition at move-out, as covered in our environmental baseline brief
- Landlord work and allowances: unfinished landlord obligations or unpaid tenant improvement allowances the buyer may inherit
Tenant estoppel certificates
Why buyers and lenders ask for them
An estoppel certificate asks the tenant to confirm the lease facts in writing before closing. The value is practical: if a tenant confirms the rent, term, deposit, and lack of defaults, and later claims something different, the certificate gives the buyer and counsel something to point to. Counsel can explain how much weight a certificate carries in a given dispute.
What they usually cover
- The documents that make up the lease, listed by date
- Current base rent and the date through which rent is paid
- The commencement and expiration dates and any remaining renewal options
- The security deposit amount and any prepaid rent
- Whether the tenant claims any landlord default, offset, or defense
- Whether the tenant holds any purchase right, and whether it applies to this sale
- Whether landlord work and allowances are complete and paid
Practical points
- Check the lease for an estoppel clause. It may say how often the landlord can ask, what the certificate must contain, and how long the tenant has to respond
- Compare the signed certificate to the rent roll and the lease file. A difference is a question for the seller and counsel before closing, not after
- Plan for tenants who do not sign. The purchase contract can address what happens if a certificate is late, incomplete, or disputes something. Some contracts allow a seller certificate as a substitute in limited cases; discuss with counsel whether that is acceptable to you and your lender
- Watch the date. A certificate signed well before closing may not reflect events since. Ask counsel and your lender what date range they will accept
Section 93.007 also gives estoppel certificates a specific role for deposits: the amount of the deposit the seller remains liable for is the greater of the amount in the lease or the amount in an estoppel certificate prepared by the owner when the lease was signed or by the new owner when the property is transferred.
Subordination, non-disturbance, and attornment (SNDA)
If you finance the purchase, your lender will usually want to know how each lease relates to its loan. An SNDA is an agreement among the lender, the tenant, and the landlord that typically addresses three things:
- Subordination: the tenant agrees that its lease ranks behind the lender's deed of trust
- Non-disturbance: the lender agrees that, if it forecloses, it will not disturb the tenant's possession as long as the tenant is not in default under the lease terms the agreement describes
- Attornment: the tenant agrees to recognize the lender or a foreclosure buyer as its landlord
Leases often contain a clause in which the tenant agrees in advance to sign an SNDA or similar document on request. Ask counsel to review that clause, the form your lender requires, and how long tenants may take to respond. A lender's requirements for SNDAs and estoppels can affect when you can close, which is one more reason to start the tenant paperwork early. We do not predict how long tenants or lenders take to sign.
Security deposits under Texas Property Code Chapter 93
Chapter 93 of the Texas Property Code governs commercial tenancies. Several sections matter directly to a buyer:
- What counts as a deposit (Section 93.004): a security deposit is any advance of money, other than a rental application deposit or an advance payment of rent, that is intended primarily to secure performance under a lease of commercial rental property
- Who is liable after a sale (Section 93.007): the new owner is liable for return of the deposit from the date title is acquired. The seller remains liable for deposits it received until the new owner delivers to the tenant a signed statement acknowledging receipt of and responsibility for the deposit and stating the exact dollar amount. The exception is a mortgage lienholder that acquires title by foreclosure
- Refund timing (Section 93.005): the landlord must refund the deposit no later than the 60th day after the tenant surrenders the premises and gives notice of a forwarding address under Section 93.009
- Deductions (Section 93.006): the landlord may deduct damages and charges for which the tenant is legally liable under the lease or that result from a breach, but may not keep any portion to cover normal wear and tear, and must give a written description and itemized list of deductions, with limited exceptions
- Bad faith (Section 93.011): a landlord who in bad faith keeps a deposit in violation of the chapter is liable for $100, three times the portion wrongfully withheld, and the tenant's reasonable attorney's fees; failing to return the deposit or itemize deductions by the 60th day after surrender creates a presumption of bad faith
What this means for a buyer, in practical terms to discuss with counsel:
- The deposit liability moves to you at closing even if the cash does not. Confirm in the purchase contract and at closing how deposits are credited or transferred
- Match the deposit three ways: lease, rent roll, and estoppel certificate
- Deliver the acknowledgment. Section 93.007(b) describes the signed statement that ends the seller's continuing liability; counsel can prepare it for each tenant
- Keep the records. Deposits, the acknowledgment letters, and the move-in condition records belong in the property file from day one
Unrecorded leases, recorded memoranda, and title
Many commercial leases are never recorded in the county real property records. Some tenants record a short memorandum of lease instead. Texas Property Code Section 13.001 says that a conveyance of real property or an interest in real property is void as to a creditor or a subsequent purchaser for valuable consideration without notice unless it has been acknowledged, sworn to, or proved and filed for record as required by law, and that an unrecorded instrument is binding on a subsequent purchaser who has notice of it.
A buyer of a building with tenants in possession should not assume that the absence of a recorded lease means the absence of lease rights. Ask counsel and your title company:
- How the title commitment treats the rights of tenants in possession, and whether the policy will list them as exceptions
- Whether any memoranda of lease, purchase options, or rights of first refusal appear in the records
- Whether any recorded memorandum survives after a lease has ended and should be released
- Whether the survey shows tenant improvements, fences, signs, or yard areas that cross property lines or easements
Property taxes and other prorations
Texas Tax Code Section 32.01 says that on January 1 of each year a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed for the year on the property, and that it exists in favor of each taxing unit with power to tax the property. In a purchase, that means the year's taxes follow the property even if the bill comes later.
Commercial contracts usually prorate taxes between seller and buyer, and many leases require tenants to reimburse taxes. Points to work through with your title company, CPA, and counsel:
- How the contract prorates current-year taxes when the final bill is not yet known
- Whether tenants reimburse taxes monthly, annually, or after the bill, and who holds those reimbursements at closing
- Whether a protest of the appraised value is pending, and who receives any refund
- Whether the property has an abatement, exemption, or special valuation that could change after the sale, as covered in our tax abatements and incentives brief and agricultural valuation brief
The Cameron Appraisal District publishes appraisal records for Cameron County property. Your title company and CPA can confirm the current figures; we do not estimate them.
Physical condition still matters
The leases tell you who is supposed to maintain the building. They do not tell you whether it was maintained. A leased building still needs the inspections you would order for a vacant one, coordinated so tenants are not disrupted:
- Roof, structure, slab, paving, and drainage, especially after storms; see flood, stormwater, and windstorm
- Fire protection and life safety systems, and whether the current tenant's use matches the certificate of occupancy; see re-tenanting an older warehouse
- Power and water service that the current tenant relies on; see power and water capacity
- Environmental conditions associated with tenant operations, using the professionals your counsel and lender require
Leases usually require notice before the landlord enters a tenant's space. During due diligence, the seller is still the landlord, so inspection access normally runs through the seller and the lease notice terms.
The closing package for a leased building
Counsel and the title company will prepare the closing documents. Buyers of tenant-occupied property commonly see these, among others:
- Assignment and assumption of leases: the seller assigns the leases to the buyer, and the buyer assumes the landlord's obligations from closing forward
- Assignment of guaranties, warranties, and service contracts the buyer chooses to keep
- Tenant notice letters: telling each tenant who the new landlord is, where to pay rent, and where to send notices
- Deposit acknowledgments under Section 93.007(b)
- Rent and reimbursement prorations: including how rent collected after closing for pre-closing periods will be handled
- Updated certificates of insurance naming the new owner where the leases require it
For property managed after closing, the first month matters: rent instructions, insurance, vendor access, and a calendar of lease dates. That is the stewardship work described in our ownership costs brief.
Notes for Mexican and binational buyers
- Entity names and signers: confirm that the U.S. buying entity is formed, authorized, and able to sign before contracts and lender documents harden; see binational capital
- Tenants and guarantors in Mexico: a guaranty from a Mexican company or individual raises questions about enforcement and collection that Texas and Mexican counsel should answer together
- Translations: Texas leases and closing documents are usually in English. If decision makers read Spanish, budget time for a careful translation of the lease abstracts and estoppels, and keep the English version as the controlling text unless counsel advises otherwise
- Tax structure: ownership structure, withholding, and reporting questions for foreign buyers belong with a U.S. CPA and counsel before closing
Documents folder for a leased-building purchase
- Seller's certified rent roll, dated
- Complete lease file for each tenant, with an index of documents by date
- Lease abstracts prepared by counsel or your advisor
- Tenant ledgers and expense reconciliations
- Signed estoppel certificates and any seller certificates
- SNDAs or other lender agreements
- Deposit schedule and Section 93.007(b) acknowledgments
- Title commitment, exception documents, and survey
- Inspection reports and the certificate of occupancy history
- Service contracts, warranties, and insurance certificates
- Closing statement showing deposit credits and prorations
Common mistakes buyers make
- Underwriting from the rent roll alone without reading every amendment and side letter
- Accepting estoppels that do not match the lease file and closing without resolving the difference
- Forgetting the deposits and learning about them only when a tenant moves out
- Missing a purchase right held by a tenant that should have been waived before signing
- Assuming an unrecorded lease does not bind the buyer when the tenant is in possession
- Starting SNDAs late and then pressing tenants to sign at the last minute
- Skipping inspections because a tenant is responsible for maintenance
- Leaving tax reimbursements unreconciled at closing
Questions to bring to counsel, your lender, and your title company
- Which seller representations about the rent roll and leases should the contract include, and for how long should they survive closing?
- Do any tenants hold purchase rights, and how should they be addressed?
- What estoppel and SNDA forms will the lender accept, and what happens if a tenant does not sign?
- How will deposits be credited, and who will prepare the Section 93.007(b) acknowledgments?
- How will the title policy treat tenants in possession and recorded memoranda?
- How will current-year taxes and tenant reimbursements be prorated?
- What should the tenant notice letter say, and when should it go out?
How Alfredo Cristo Realty Group helps
We help Brownsville and Lower Rio Grande Valley buyers organize the property side of a leased acquisition—building the lease file index, comparing the rent roll to the documents, tracking estoppel and SNDA requests, coordinating inspection access with tenants, and setting up rent instructions and lease calendars as part of management / stewardship. We connect buyers with Texas real-estate counsel, Mexican counsel, CPAs, lenders, and title companies, and serve as a Brownsville accountable point through consultation / contact. We are not lawyers or lenders, and we make no promises about values, rents, closing dates, or outcomes.
Review current properties and market context without pressure toward a listing, or read about Alfredo's background. Related reading: industrial land due diligence, landlord leasing guide, environmental baseline, selling an industrial or income property, owner-occupant financing, and binational capital. More on the Insights hub. Spanish readers: Artículos.
The objective: help buyers know exactly which promises come with the building before they own them.
Sources
- Texas Property Code, Chapter 93 (Commercial Tenancies), Sections 93.004, 93.005, 93.006, 93.007, 93.009, and 93.011, via the Texas Legislature's statutes site (accessed October 30, 2026)
- Texas Property Code, Chapter 13 (Effects of Recording), Section 13.001 (accessed October 30, 2026)
- Texas Tax Code, Chapter 32 (Tax Liens and Personal Liability), Section 32.01 (accessed October 30, 2026)
- Cameron Appraisal District, public appraisal records site (accessed October 30, 2026)
Educational disclaimer (repeated): This page is buyer education only. It is not legal, tax, lending, appraisal, or investment advice, and it does not predict the outcome of any purchase, lease dispute, or deposit claim. Do not rely on it for contract, closing, or financing decisions. Work with Texas real-estate counsel, a CPA, a title company, and your lender, and Mexican counsel where buyers, sellers, tenants, or guarantors are in Mexico. Verify the current statutes and every lease document for your property before you sign or close.
This guide is also available in Spanish: /es/articulos/comprar-nave-industrial-arrendada-brownsville-estoppel-snda.