How Do I Put Out A Rent To Own Tenant?
Some people keep telling me if I take an option fee from the tenant upfront I would need to have an attorney do a foreclosure instead of a normal eviction. I do not understand?
You get an eviction and the former t/b has to go to small claims court to request any kind of refund. Is this correct?
[ Edited by theregisterfiles on Date 04/30/2011 ]
A lot rests on how your Contracts are written, but generally speaking, Option Consideration is paid for the exclusive right to purchase the property for a set period of time (usually 12 months). The Optionee receives exactly what he paid for; therefore, it is nonrefundable. You would evict like any other Lease (presuming your Lease and Option are separate Agreements).
[addsig]
Hello, LeaseOptionKing,
That is the problem. I was told in North Carolina you would need to conduct a foreclosure with a rent to own tenant verus a regular eviction. Can you explain more? How much does a foreclosure cost anyway?
First of all, who told you that?
[addsig]
It might be related to a law passed late last year, SB 1015, which covers foreclosure rescue schemes, Land contracts, and Lease Options:
For lease-option contracts, the law requires that the contracts be executed at the same time. In many cases, the lease is executed after the option payment is made, and the lease shows a much higher rent than initially discussed or has other terms unfavorable to the borrower. The law gives the borrower the right to cure a late payment once in a twelve-month period, requires that the option contract be recorded, and restates that landlord-tenant law applies in these agreements.
Perhaps it is the recording of the Option that is causing the problem; however, that does not in and of itself require a foreclosure--nor does the law require a foreclosure. Simply have the Optionee sign a notarized Quitclaim that you will execute (record) upon default to release the Option.
[addsig]