Posted by Matt L. (STL) on June 11, 2002 at 11:22:08:
Lynn,
Where in MO are you located?
NEWBIE help= L/O deposit back? - Posted by star
Posted by star on June 10, 2002 at 18:32:29:
We had a contract on a L/O move in was supposed to be June 1st. We collected $500 as non-refund deposit. We were to collect remaining $4500 at move in. We were scheduled to close on the house May 15th and it keeps getting pushed back by our lender for various reasons. We’ve been communicating with our tenants, they are frustrated as we are. HUD has our paper work, we close Tues or Wed. We got a phone call from our tenant, wants their $500 back- feel like we’ve just pulled them along. What do we do? Is the contract broken because we were not able to provide them a place on the 1st? Do they get their $500 back or do we keep it? Either way we have to start over with advertising and this time with a mortgage payment. HELP!
clarification - Posted by star
Posted by star on June 11, 2002 at 10:52:16:
Sorry for the unclear post. David answered in his post. See if you agree. Thanks David,
We bid on a hud home, are using a lender for the $. The lender came highly recommended by some other investors, but has really not come through for us. The lag has made us lose a tenant/buyer. Just wonder if the $500 inital non-refundable down needs to be returned. I’m thinking legally no, good sportmanship- YES. Is that what you all do?
Re: NEWBIE help= L/O deposit back? - Posted by lynn(mo)
Posted by lynn(mo) on June 11, 2002 at 08:24:50:
Please clarify your post! Nate is right. Hud has no business in between a lease option deal…The way you have explained this doesn’t make sense…
huh? - Posted by Nate(DC)
Posted by Nate(DC) on June 10, 2002 at 21:28:12:
What is HUD or a lender doing in the middle of a L/O? You need to explain this better. I don’t get it.
NT
Re: NEWBIE help= L/O deposit back? - Posted by DavidV
Posted by DavidV on June 10, 2002 at 20:39:14:
Do not keep the $500. You only want to keep money from a tenant or prospective buyer if they do not perform something they contracted to. This was not their fault.
If it were me, i would offer to lower the option money, maybe to $4.5k instead of 5k. Or some other kind of fringe benefit to sweeten the pot. It may be cheaper to do that than pay more advertising and holding costs.
I would call the top dog in the lenders office every day until it closes.
David
Re: clarification - Posted by Mike Daly (Atlanta)
Posted by Mike Daly (Atlanta) on June 11, 2002 at 11:56:47:
Whether you’re legally required or not to return it depends on how exactly your lease option agreement is written. Because you haven’t given possession to your T/B in accordance with your lease than you would be in default on the lease. Since the $500 is option consideration it’s not technically related to the lease, so you might not be required legally to give it back. I don’t know how you’d fare if this went to court though.
As David mentioned, I’d try to offer them something as compensation – lower option consideration, month’s free rent, etc. If you can’t appease the T/B that way, I’d give the money back.