Do I Have To Respond To Lawyer's Letter?
Many moons (about 3 years) ago and before I learned about what a Lease/Option was, I sold my home with owner financing. I became the bank for my buyers with a 30 year contract (dumb, I know). Anyway, now my buyers have a problem with the contract because I am enforcing what the contract says. Example, contract addendum states letter for monthly payment must be postmarked by the 20th of each month or buyers forfeit all previous credits towards principal balance. (There is reasoning behind this particular term for these buyers, they rented from me before this, always made their payments, but they were often late and never paid the late fee unless I directly asked them to, so I wanted the default clause to be so severe that they would never be late). As the story goes, for the month of March their letter was postmarked the 22nd, so I called them to let them know they would not be receiving any previous credits. Of course the phone conversation ended on not so good terms and 2 weeks later I receive a letter from their lawyer. He says that "after studying this matter he believes that no default has occurred and he is confident that any Court called upon to decide this matter would rule that there has been no material default and his clients would not have to forfeit any payments made".
My first question for all of you, is it in my best interest to answer their lawyer's letter or leave it alone and let them come after me to try and prove how
"illegal" my contract is?
My second question is, who is responsible for any court fees if this goes to court?
And lastly, are there only certain things a contract can contain or if I wanted to put in there that I wanted a fruit cake (yuk!) every Christmas for the next 30 years or they would lose all their rent credits when I didn't get one, be upholdable in court? Sorry, maybe a bad example, but you get my point!
It's funny how fast you can become the bad guy when you try to do what the contract states and it's in your favor.
Any comments or opinions are greatly appreciated, just trying to get a feel for where I might stand without having to pay for it...yet!
Thanks to all who reply!
Bea
No, you don't respond to the attorney letter.
Give the letter to YOUR attorney to determine whether a response is warranted. If so, your attorney should prepare the answer.
Bea,Did you have an attorney draw up the contract according to Kansas law? If not have you attorney review the contract and letter from their attorney. Have you kept documentation of their track record? The burden of proof rest on you to prove they have not lived up to the contract terms.
I agree that you shouldn't respond in any way to the lawyer's letter, but you should get it to your lawyer and get his advice on what to do now.
Never respond to a lawyer’s letter. Let your attorney do that. That said, bear in mind that lawyers often send letters to individuals simply as a tactic to pressure them into something. Most people get very nervous when they get a stern letter from a lawyer. And lawyers know and use this to their full advantage.
In theory, anything that doesn't violate state, federal, or local laws can be included in the contract. Even a fruitcake.
I’m not a lawyer, so I’m just trying to think logically here. Assuming their lawyer isn’t just bluffing, I would guess that he has either found something in your contract that would invalidate your postmark requirement, or he intends to argue that his clients have no control over the stamping of postmarks on letters at the post office. They delivered the letter there before the 20th, and are not at fault if the post office is so inefficient. Furthermore, depending on how your contract is written, your acceptance of their payment may constitute your desire to continue with their current contract. To be honest, I have a difficult time imagining a court ruling in your favor and forcing them to lose three years worth of balance credit because of a single payment that’s two days late. You may need to prove that they have shown a systemic disregard for the terms of the contract.
As for court costs, generally each party pays their own court costs. However, the court can make an award forcing one side to pay the court costs of the other side. Also, there may be a method to file a claim for the court costs. And you might also have something in your contract that discusses responsibility for court related costs in case of legal action.
But make sure to check everything with your own layer before taking any further action.
Good luck.
Your clause is a challenge. You have waived a red flag in front of a bull. That is the type of clause that sets up an opposition. Just put a simple late clause in and let it go at that. You must be aware of the human condition they all screw up sooner or latter. It is the nature of life and of course tenants.
Thou shalt not challenge your tenant. Your contract is like saying, you will pay your rent by the lst of each and every month. It will be tendered prior to noon and you will wear a red dress and be accompanyed by a band with a drummer who will be striking the drum in a timely manner.
Do not answer the attorny's letter. May I suggest as a matter of achieving a peaceful relationship. Just cool it and take a little slipping every now and then.
Your life will be simpler and you know those little pills you take for stress and stuff. You will not need them.
Here's to the good life. My tenants all love me, never pay their rent on time. But when I am short and I show up and ask them for a payment in advance, cause I need to fix the roof, or pay an ex wife. They all help me. You can do the same.
Lucius
.i dont think you'd win this one if this is the first time it happened. i would not let it go, but have an attorney respond to the letter outlining the terms of your contract and and if it happens again you will enforce your rights. is there an acceleration clause if it is postmarked late ?[ Edited by lp1 on Date 04/21/2004 ]
Thank you all for responding!
I did not have my lawyer initially review this contract, if I had I probably wouldn't be in this predicament. Lesson learned! This is only the second time there has been a problem since the beginning of this contract, they bounced a check in August 2003, but took care of it promptly so in the end they kept their rent credits. All in all they've done well, but probably only because they didn't want to lose their credits. I do have proof of both incidents if it's needed. The only acceleration clause I have is if payments are received late more than 3 times in a calendar year then the loan may be called due.
Lufos, I'm really not that hard to get along with but the more I try to work with these people all I get is more complaints about what all is wrong with this contract. I told them if they weren't happy with things they were more than welcome to obtain their own financing. This would be ideal for me as well!
Could a new contract be drawn up that would satisfy them and me, if they aren't able to obtain financing? Or could that cause even more problems?
Thanks again for all your help!
Bea
Thank you all for responding!
I did not have my lawyer initially review this contract, if I had I probably wouldn't be in this predicament. Lesson learned! This is only the second time there has been a problem since the beginning of this contract, they bounced a check in August 2003, but took care of it promptly so in the end they kept their rent credits. All in all they've done well, but probably only because they didn't want to lose their credits. I do have proof of both incidents if it's needed. The only acceleration clause I have is if payments are received late more than 3 times in a calendar year then the loan may be called due.
Lufos, I'm really not that hard to get along with but the more I try to work with these people all I get is more complaints about what all is wrong with this contract. I told them if they weren't happy with things they were more than welcome to obtain their own financing. This would be ideal for me as well!
Could a new contract be drawn up that would satisfy them and me, if they aren't able to obtain financing? Or could that cause even more problems?
Thanks again for all your help!
Bea