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My parents are farmers and recently bought some pasture land in South Dakota. The previous owner, who we'll call Bob, is an aging gentleman who has lived there all his life in a small, now dilapidated house. My parents planned to allow him to remain rent-free for the time being, and verbally told him "not to worry about rent right now." No lease or written rental agreement has been made.

However, someone pointed out that my parents could be exposed to serious legal risk if something happens to Bob or he decides to sue my parents as landlords for one of the many potential problems with the house. They think it's possible that Bob will not get around to moving out, so this situation could continue for a long time. They didn't realize they may have been assuming responsibility for him as a tenant when they purchased the property from him. The assumption was he could continue living independently the way he'd always lived until he decided to move on.

Are my parents at risk of getting sued or prosecuted? What can they do to protect themselves? Are they obligated to either evict Bob or enter his house to inspect it and make any necessary repairs? Are there deadlines to take action?

Any earnest advice or suggestions are appreciated. Thank you!

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  • Guess your parents could gift the dilapidated house (but not the land it sits on) back to Bob so that he changes his status from tenant to leasee.
    – Greendrake
    Dec 29 '21 at 4:15
  • There is risk, but the bigger risk, IMHO, would be of someone, e.g., dumping toxic waste or setting up a meth lab or just dumping ordinary trash or failing to police noxious weeds or not taking steps to prevent wildfires, on the property destroying the value of the land itself.
    – ohwilleke
    Dec 29 '21 at 17:09
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Yes

Bob is a tenant even if he pays no rent (selling the property to your parents may qualify as consideration for the rent anyway) and is entitled to everything a tenant is entitled to including a livable home.

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