How do I protect my self as a seller from a tie up with the court of common plea during a default on a lease with option to purchase. In most states judges will not evict on just plain leasing terms
It is very important to use separate lease and option agreements. If the are on one agreement, it does make it difficult becuase the tenants has equitable rights to the property. If you have a separate lease, you can usually evict just on the breach of the lease.
The Tenant can still claim equitable interest, but it is a slim chance he will even answer the complaint at all, and if he shows up, the chances are he will still not mention the Option (they often lose their paperwork). If it is mentioned, you should bring a copy in case the judge asks to see it. A well-written Contract will likely get you off the hook if you structured the deal correctly and did not take advantage of anyone. But there is always that risk. In some states a CFD would be a better sales tool.
[addsig]
Your going to get responses from both tenant buyers and investors...but my guess is that since your not advertising it as a l/o then the majority have been from investors.
I dont set the price until the rental term is up...in the lease its written that at the termination of the rental agreement "Tenant" has the first option to buy once an appraisal has been completed.
When buying in a L/O I do just the opposite and lock in the price up front.
After doing some research I now just have one question. When the buyer/tenant pay the option to purchase money of lets say 5,000 up front does this money apply to the down payment in the end? How does this typically work?
As a Mentor myself, I am doubly offended. People like this give creative real estate as a whole a bad name and more specifically the Mentor/Protege relationship. Go get her, Claude!
[addsig]
It is very important to use separate lease and option agreements. If the are on one agreement, it does make it difficult becuase the tenants has equitable rights to the property. If you have a separate lease, you can usually evict just on the breach of the lease.
The Tenant can still claim equitable interest, but it is a slim chance he will even answer the complaint at all, and if he shows up, the chances are he will still not mention the Option (they often lose their paperwork). If it is mentioned, you should bring a copy in case the judge asks to see it. A well-written Contract will likely get you off the hook if you structured the deal correctly and did not take advantage of anyone. But there is always that risk. In some states a CFD would be a better sales tool.
[addsig]
Your going to get responses from both tenant buyers and investors...but my guess is that since your not advertising it as a l/o then the majority have been from investors.
I dont set the price until the rental term is up...in the lease its written that at the termination of the rental agreement "Tenant" has the first option to buy once an appraisal has been completed.
When buying in a L/O I do just the opposite and lock in the price up front.
After doing some research I now just have one question. When the buyer/tenant pay the option to purchase money of lets say 5,000 up front does this money apply to the down payment in the end? How does this typically work?
When I do my L/O I credit the option fee. It will be hard for someone to get 5K option fee if it is not credited.
- DarvinM
As a Mentor myself, I am doubly offended. People like this give creative real estate as a whole a bad name and more specifically the Mentor/Protege relationship. Go get her, Claude!
[addsig]
her name sounds familiar