Posted by Kristine-CA on May 24, 2005 at 18:20:51:
I’ve had trouble with this very issue. It’s not clear to me how to write a
contract for someone’s future interest in a property. Since I’ve worked
several title flaw deals and probate deals, being able to solve this issue
would really be helpful.
You might want to consult with an attorney about what would be
binding for future interest in a property. Right now the seller only has
1/2 interest and it’s not clear to me how to tie up a potential future
interest.
I?m talking to a husband who is half way done with their divorce process. He thinks he would get this house. He still needs to see a judge to finalize. As of today, the title is held by both of them.
My question is, if I get a option from this husband today before the property issues are finalized in the court, AND should he get this house as he is anticipating, is this option still valid?
He got lots of stuff going on and wants to see things taken care of today, like finding a buyer.
Re: Is this option valid? - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on May 24, 2005 at 18:55:31:
Nothing wrong with contracting for an interest that the seller does not have yet. It is very high risk. It seems to me that this would be legal, but difficult if not impossible to enforce. If you were to ask two lawyers about this you would probably get two different answers, followed shortly by requests for a retainer.
If everything works as you have been led to believe that it will, then the deal could be a good one. I have a problem with paying an option consideration for an option that will not be an option until something else happens. Things have a way of changing, and money has a way of getting away from some people so it can become very difficult to recover. People reconcile, sometimes they die, and from time to time they just can’t be found.
I would acquire now with very little cash. Pay the balance of the cash when I can get a full option. I might also consider taking a quit claim deed in escrow (now) just to make my position stronger.
Re: Is this option valid? - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on May 24, 2005 at 17:15:36:
He can only sell you an option on what he owns. Today that sounds like half of a house. Not worth too much if the owner of the other half does not agree, and she just may not.
The house belongs to the couple. The husband expects to get the house when their divorce is finalized. It will be heard in Family Court in a month or two. There will be naturally a Court Order stating who gets the house. And whether he gets the house and/or whether the wife agree to is not the question here, because that?s up to the judge.
With the anticipation of getting the house, the husband gives me option to buy the entire house, and he does that today. We write up the option, signed and option consideration given.
Later on the husband gets the house as he thought. Then the husband changes his mind about selling to me for some reason.
Do I have enforceable option at this point?
He doesn?t have the whole house today, but he will have the whole house when I want to exercise.