Lease Option Contract Help
Yes I am going to retain a lawyer. But interested in your opinions. My tenant/buyer delievered to me a letter on July 15, 2005 stating their intent to buy the house within the next 30-60 days. After reading the option below, do you believe that their are able to buy the house after July 31, 2005?
6) Optionor grants Optionee the right to exercise this option for a period commencing on January 1, 2004 and terminating at midnight, July 31, 2005. If not exercised, this option shall expire midnight on July 31, 2005 and Optionor shall be released from all obligations hereunder, legal or equitable. The obligation shall cease and Optionor shall retain the consideration.
7) Optionee shall deliver to Optionor a written Notice of Election to Purchase. Property closing date shall be no earlier than thirty days and no later than sixty days after the Optionor’s receipt of the notice of election to purchase.
That is not the answer I want to hear. To me, this means that on July 31, 2005 the option to buy the house is terminated.
6) Optionor grants Optionee the right to exercise this option for a period commencing on January 1, 2004 and terminating at midnight, July 31, 2005.
When I wrote the 30-60 day, I wanted notice for a 1031 exchange. I did not intend for it to extend the option period. In my rental agreements, the tenant must give 30 day notice to vacate, but the 30 day notice can not extent the rental agreement.
Exercising the option means completing the sale, not making the decision to do so. Considering the date of the notice of intent, it is impossible for the optionee to fulfill both 6. and 7. In my opinion, Brenda, the option is no longer in effect after midnight of July 31, 2005.
As a practical matter, if you can do this to make your 1031 time line you could as a courtesy offer to extend the option period until August 15 (or whatever) for additional option consideration.
The other issue is the lease. Hopefully, the lease terminates if the option is not exercised by the end of the option period. If this is so there is no need for further notification on the lease since it is spelled out in the lease when the lease will end.
Regards,
Ed
I am going to agree with your original position, edmeyer. Let me explain why. Due to the Tenant/Buyer coming back sometimes years later to sue and claim rights to the house (and somehow winning in some cases), the Option should have an end-date where it unequivocally expires, and the Option should make no allowances in writing. You can verbally allow the Option to extend until closing, but it should not be mentioned in writing. Just my take. I make my Tenant/Buyers exercise 30 days before it expires (which still takes us a couple of weeks past that date sometimes).
[addsig]
I agree; her Contract could have been better worded.
[addsig]
I have been talking to attorneys for 2 week they all say I have a fraud case and my equity was stolen
Already have
In our area, LEGAL AID loves your type of case.
And they win them, too. Judges do not look kindly upon investors or attorneys who commit fraud upon homeowners.
Have you visted Legal Aid?