Lease/Option Heading to Law Suet - Advice - Posted by Steve-nc

Posted by Steve-nc on September 07, 2003 at 21:36:25:

Thanks JohnBoy for your responce.


Lease/Option Heading to Law Suet - Advice - Posted by Steve-nc

Posted by Steve-nc on September 07, 2003 at 01:24:38:

Sorry for the length. Any advice would be much appreciated.

I entered into a L/O with a seller for 1 year to purchase their condo. My intent was to keep this propeerty long term as a rental. I subleased the property to a traditional tenant for 1 year and had to evict the tenant last June, 4 months before I had to either exercise my option to buy or not. The rental market was weak and the deal a little thin, so I decided not to purchase the property. With a few of my other rentals vacant, cash reserves getting low, I decided to break the lease and give the condo back to the seller early. I paid the seller an extra months rent for the trouble and gave it back.

The evicted tenant left the place a mess. So, before giving it back I painted, replaced the kitchen floor, cleaned carpets, as if getting it ready for another tenant. I would say the condition of the property is 95% of what it was when I took possesion.

The seller needless to say wasn’t happy. I kindly explained my problem with the tenant eviction, that I had been paying the rent out of my pocket the last few months and that I could not find a short term renter nor did I want to exercise my option to buy. First verbally the seller agreed, then later, threatened to hire an attorney. I called the seller’s bluff by saying that we could go that route but the legal cost and time would be expensive.

Now it is September. My first letter form the seller after three months, saying that the condo is completly thrashed. “It is not in the pristin condition as when she had it.” Nit-picking the condition of the proerty to death. The seller did have to exterminate a bug problem, the 5 year old “white” carpet a little more worn, yet was cleaned, doesn’t like the color of the new kitchen floor, a small 3" tear in the bath wall paper, etc…Seller now says, "The estimated cost to repair damages is $6,130.00 and is holding me to the lease for payments.

The seller isn’t letting go, and I think this Lease/Option is heading to a law suet!

Our lease agreement did say “I was responsible for any damages, normal wear and tear excluded.” Also, the lease states “The prevailing party shall be entitled to all cost incurred with any legal action…” including “reasonable attorney fees.”

Should I:

  1. pay up
  2. call bluff, be quite, and wait to see if their attorney calls
  3. work it out in court
  4. contact the seller and try to work something out (seller not flexable here)
  5. go a head and buy the property and take a small to break even cash flow. If it goes to court and the seller is rewarded, I would rather use the money to purchase the property. (seller will still let me purchase their problem)

Again, thanks for your time and any advise would be greatly appreciated!


Keep it short and general please… - Posted by William Bronchick

Posted by William Bronchick on September 07, 2003 at 20:57:44:

In the future, Steve (and this applies to everyone), please keep the Q’s short and more general and you have a much better chance of getting it answered. We lawyers sweat about giving out specific advice on these forums, then getting sued for it. We also have limited time, so we tend to gloss over the long, fact-based scenarios.

For example, the question could have read:

“I leased a property and gave it back to the owner 8 months later in slightly worse condition than I took it. He is claiming thousands in damages and threatening to sue. What is my potential liability or options in this scenario?”

My answer isn’t much different than JohnBoy’s, except I would flush him out for proof. Remember, if he sues you, he has the burden of proving damages in court. Ask him to indentifiy specifically in writing the damages and submit to you photos and copies of invoices for the repairs. This is the same proof he’ll need to bring to court, so if he doesn’t have it now, chances are he’ll be unprepared for court.

But if he shows his cards and they are Aces, you might consider offering a settlement.


You can find a copy on my website at under “LEGAL FORMS”

Re: Lease/Option Heading to Law Suet - Advice - Posted by JohnBoy

Posted by JohnBoy on September 07, 2003 at 15:32:38:

If you would rather take the money the seller could recover from a lawsuit, then just take that money now and buy the property. Save yourself a lot of costs and aggrevation.

As for the seller verbally agreeing on things, did you get a signed release from the seller to break the lease and waive any additional costs or rents? If not, you are still liable to the seller for all the rent and any liability on damages to the property according to the terms of your lease. The only thing you “might” save a little money on is items that the court would find normal wear and tear vs. damages.

Any problems you had with your tenant and monies you paid out of your pocket as a result have nothing to do with the seller. This is your problem, period! Why should the seller have to incur any costs because of your tenant? Or because your cash flow is getting thin? Or because you have a hard luck story? You made a deal, signed a contract, so stand behind your obligations and live up to it. Plain and simple.

You are correct on one thing. A lawsuit could get pretty expensive. More likely than not, that expense will fall on your wallet, not the seller’s. So find a way to resovle it if possible, or pay up and stand behind your responsibility.

  1. Pay the damages.
  2. Buy the property.
  3. Risk losing a lot more money trying to get out of your obligation to fulfill your contract with the sller.

Re: Keep it short and general please… - Posted by Steve-nc

Posted by Steve-nc on September 07, 2003 at 21:33:11:

Thank you William. And from here on I’ll keep short and more general.