Defaulted TB Taking Me To Court !
I have a lease option that I lease optioned to a tenant buyer October of 2001.
I used Ron Legrands paperwork with a lease agreement, and a standard purchase and sale agreement. The RLA was for $900/month for 12 months. The SPSA was stated that the binder was $2000.00 with an additional $3000.00 due in 180 days. The additional binder was never paid.
The rent credit was verbal of $100.00 per month if house purchased, and would be documented, and presented when needed to the lender. At one point she asked me for an accounting of the total so she could see where she was at. I sent her a copy of the total. Stupid.
TB was to close this September. I had given her an additional two years for a total of three to close. Stupid. I was just really trying to help her. In September she stopped paying her rent. October I evicted her. She hired an attorney, filed a motion to dismiss, and it went before the judge this past week. Before the judge she claimed she had paid in $6000.00 toward buying the house. That's the $2k, plus 100/month. She wants that money back. She stated she cannot purchase the house. Now I have to get an attorney to go back to court to resolve this and she is still in the house paying no rent.
Anyone else run into this? Did I do my paperwork wrong? This was my first LO, not my last, but only time I have had a problem.
Any feedback would be greatly appreciated.
Don't beat yourself up too much. Call up her attorney offer her half the claim to go away ($3,000). Point out that if she fights there is at least a 50% chance she will loose and she'll have at least $3,000 or $4,000 in fees to get there. Same calculation goes for you.
SunRE,
I think the crux of your case is this.......
"I used Ron Legrands paperwork with a lease agreement, and a standard purchase and sale agreement."
Now, since the defaulted TENANT has a lawyer, you should too.
When you go to court with your attny, explain to them, to pass along to the judge and the other party, you are there on an EVICTION CASE, based on a DEFAULTED LEASE, where the DEFAULT in the LEASE was NON-PAYMENT of rent.
The option agreement is seperate, and stand alone.
or purchase agreement, which ever you used.
Should the TENANT want to contest that, they are FREE to BRING ANOTHER CASE, of their own, to contect it.
However, you simply want them OUT of the house, because they DID NOT PAY RENT!
What's the explanation for that?
Why does the tenant feel they can live in the house for FREE?
They can't by the way.
This is how I handle it, and is how it should be handled.
Evict them with the lease, and use that document ONLY in court, because that is what YOU FILED on, nothing else.
Make sense?
Hopefully your purchase agreement did state in it somewhere that if the buyer defaults on any other agreements they MAY have with you, the purchase agreement is terminated, and all monies recvd are non-refundable.
Anyway, that's my two cents, just have your lawyer deal with it this way, it happens all the time.
You can TELL a T/B'er one thing, both verbally and in writing, but when they don't get what they want, their memory often fades.....especially when a lawyer tells them they might have a chance to undo the mess...which most know they cannot if your paperwork is tight.
Good luck, and get em out,
Jim FL
Next time, use better forms
[addsig]
Sunre,
You supplied the paperwork to your Tenant for a claim of "Equitable Title" to this property and I would guess this is why the Judge did not evict her.
Remember that having the option or purchase agreement separate from the lease is not going to save you when the Tenant claims "Equtiable Title" and shows the Judge their copy of the option. I have seen cases where the Judge ruled that the seller will have to use a Judicial Foreclosure to get the tenant/buyer out of the property because of the Equitable Title issue.
In today"s climate when it has to do with creative investing, not only the courrts but the Attorney Generals office looks closely at investors who do not make full disclosure in their paperwork, look around you will see it happening more and more.
Nothing should be done verbally and you should spend the money to have your paperwork reviewed by an attorney to make sure it is state specific. You can pay now or pay laterr, but without state specific paperwork chances are you are going to pay sometimes the hard way.
John $Cash$ Locke
[addsig]
Without exception, in small-time civil litigation, I have always prevailed by using a counter-suit as my defense when I had a legitimate claim against the plaintiff. And most residential lease agreements provide plenty of opportunity for legitimate claims/default against the tenant/buyer. I was recently sued for $2000. I countered-sued for $5000.00 and won. At the very least, the judge will probably throw out both sides and you will pay nothing.
Do not beat yourself up. You actually did quite well. It is not your fault that a tenant decided to sue. Lawsuits happen every day and could happen to any one of us. What lessons will you learn from this - mainly that landlord are the object of many lawsuits. Common sense says that you should win, but common sense it not all that common.
My last lease option the tenant said that she was getting sick in the house and that she was going to the doctor to have some tests run. I offered to give her back all her non-refundable deposit and $500 moving money just to get her out of the house.
Try to negotiate and move on.
Brenda