Re: L/C or L/O part1&2 - Posted by Jim FL
Posted by Jim FL on July 30, 2001 at 02:42:15:
Robert,
I’m not sure what state you are in, so some of this may not apply where you are.
But, as Mike said below, I did have an eviction case where my T/B’er showed up to court claiming he not only should not have to pay rent, but that his “option money” should be used to pay it, and the remainder refunded to him.
The tenant/buyer also waved a copy of the deed, showing that I was not on title, and therefore in his opinion, I should have never been entitled to rent to him, or give him an option to buy.
The judge did peak his eyebrows a bit, and this concerned me. But, I could tell by the smirk on his face as I answered his questions, and the tenants claims that he was merely getting a kick out of the tenant trying to save his non paying rear.
The judge asked first, “Why are you not on the deed to this house?”
I responded with; “I have a terms sale with the person on the deed, and title does not transfer to me until I satisfy all the terms of it.”
He asked," Do you have a copy of that with you?"
I said, “no”…
And he said; “Well, it is not important here anyway.”
Score one for me! YAY!
Then the judge said, “What is this about a $5k deposit?”
I said, "Your honor, there was no “Deposit” for this lease, there was a completely SEPERATE agreement for an option to purchase this home, which CLEARLY stated there was a “Non-refundable option fee” paid.
“But, we are here on the SEPERATE LEASE agreement, for the fact that the tenant has not paid rent, and refuses to leave the home.”
The judge asked me: “Does the lease mention this option in it anywhere?”
Me: “No sir, it does not, they are seperate agreements.”
The judge then turned to the tenant, smirked a bit and said “Sir, it does not matter WHO is on title here, you signed a lease with Mr. Mitchell, and agreed to pay him, why did you not do that?
And if you want to contest the option agreement, I suggest you bring another suit about that, but it looks pretty shut and closed to me.”
I got the precedence I wanted from the case, meaning the judges opinion and interpretation of “How?” my L/O works, using two SEPERATE agreements.
That stood up in court, and the tenant was NOT allowed to claim equitable interest.
Sadly however, I made a technical error on my 5 day notice, and the judge caught it, dismissing the case as a result.
But, the judge then gave the tenant a lecture, told him to meet with me now, right in front of the judge and give his word as to when he’d be out of the house. The judge explained that this would not be court ordered, but if he worked against me me, rather than with me, surely I file again, correct the technical error on the form, and most likely win, costing him more money in the long run.
So, this is why I tell you, “I would use the Lease Option, if I had this deal you are working with.”
And search out a new attorney, there has to be a better one out there for you.
I do have one question.
When the attny called the judge, and the ran the scenario by the judge, did they tell him there would be two SEPERATE agreements or just one?
Bottom line, if you goto court to evict this guy, and have two seperate agreements, and he brings the option money up, or that agreement, it will at the very least give you reason to continue the case to address a new issue. Especially since the lease violation is why YOU are there to PROVE.
Also, make it VERY clear in the agreement, and perhaps in some sort of CYA that the buyer signs, acknowledging the fact that the option money is lost if they do not purchase for ANY reason.
This may or may not hold up in court, but perhaps if you MAKE IT CLEAR in the beginning to the T/B’er, they will think twice before attempting to bring a suit, or use it in some way.
and by the way, I’m by no means an expert, or a lawyer, so certainly run everything by someone well versed in your state laws before doing it, just make sure they actually know what they are doing.
Perhaps talk to a local REI club, find someone doing these deals, and get their attorneys contact info.
A second opinion sure seems worth it when there is a possible $20 involved now.(more later, in both potential profit, and cost with an OOPS!)
I hope this helps a bit, and sorry to ramble,
Jim FL