Posted by thedonald (ONT-CDN) on July 15, 2000 at 16:47:56:
Probably because as a Realtor or agent she wouldn’t receive any commission from the majority of L/O’s until they are finally executed and sold - and that’s only IF there’s been any listing involved in the transaction to begin with.
Ask your Realtor friend if it is OK to lease a home for rental. Then ask her if it is OK to have an option to buy the same home at some time in the future. If not, ask her for the citation in the code of Maryland that prohibits such activities concurrently.
These Realtors have been well trained with the standard stuff - anything that deviates from the norm, and their ability to generate a commission check off a sale throws them for a loop, and irritates them to no end.
Are Lease Options Legal in Maryland? - Posted by essbee
Posted by essbee on July 15, 2000 at 12:40:53:
A friend of my relative who is a Realtor swears that Lease Optioning is illegal in Maryland. Is she right?
I have done them in Maryland. They aer perfectly legal - Posted by Tarun_md
Posted by Tarun_md on July 17, 2000 at 21:45:05:
Re: Are Lease Options Legal in Maryland? - Posted by Bill Gatten
Posted by Bill Gatten on July 16, 2000 at 14:29:01:
My guess is that either your relative, or your relative’s friend (whichever one is the Realtor…we have a misplaced modifier there, tsk, tsk) is either very new to the Real Estate business, or is a bit naive. The fact may be that they were told by the Realtor’s Broker that Lease Options would not be allowed within the brokerage. Or, they may have been informed that lease options violate a lender’s Due on Sale Clause: which they do…however, most investors don’t care. Violating a DOS is not illegal, it’s just not authorized by the lender. The prevailing attitude by optionors and investors is that, ?What they don’t know won’t hurt ?em).
Because of the litigious volatility of lease options, many brokerages, especially national ones (Coldwell Banker and Prudential, for example) have put the word out that L/O’s are verboten. This is because of the high risk and vulnerability that brokers encounter when lease options go awry. Lease options are considered to be among the top reasons for lawsuits against RE brokers. Defaulting tenants can really make life tough for Optionors and Optionors can way too easily defraud tenants and, of course, the first ‘sue-ee’ is always going to be Mr. Deep-Pockets Broker.
Concerning your consternation abut the legality of L/O’s, think about it logically (though law is not always logical): Doesn’t it follow that if leasing a property out is not illegal, and one’s giving a tenant the right to buy the property someday is not illegal (or anyone’s business), can a Lease with an Option to buy someday be illegal?
If you go down to your local Association of Realtors’ office this afternoon, you’ll find stacks of Lease Option forms for sale, which forms were prepared by the Association, and which are all endorsed by the Department of Real Estate.
YES - Posted by thedonald (ONT-CDN)
Posted by thedonald (ONT-CDN) on July 15, 2000 at 18:19:22:
Look up these sections in the Code of Maryland: § 3-101, § 8-202, § 10-402, § 10-702. Or simply search on lease AND option in the same database. Amuse yourself and your Realtor friends at the same time