Posted by michaela-CA on January 10, 2008 at 13:46:59:
I’m not a lawyer and I haven’t done any lease-options, so this is just speculations.
In theory this almost sounds like an ‘agreement for deed’, since you both agreed that the buyer wold get the deed, if certain conditions were met after a certain amount of time. In Georgia an ‘Agreement for deed’ is treated like a lease, meaning a tenant/buyer’ can get evicted, instead of foreclosed upon.
If you’re anywhere near Atlanta, then I would suggest for you to try to contact an attorney named ‘Bob Witcher’. He knows his stuff inside and out and many, many investors use him for anything that could get complicated legally. He’s very straight forward and will tell you whats real and not necessarily what you want to hear. I don’t have his number handy, but I’m sure you could find it in the State Bar site.
Again, my comparison to an agreement for deed is only speculation.
Owner Financing Issue - Posted by Dana
Posted by Dana on January 10, 2008 at 08:41:09:
This problem is somewhat complex, so I’ll try to keep it as brief as possible…
We owner financed a home to a family who was unable to obtain financing through a bank. They saught to purchase the home before the construction was complete. Therefore we reduced the price of the home for the cost of the remaining work, and sold the home “AS IS.” This is also stated in the LEASE PURCHASE AGREEMENT signed by the buyers and sellers. This was agreed to, due to the fact that the gentleman attempting to purchase was in the construction business and agreed to complete the remaining work himself. It is clearly stated in the contract that the home was sold “AS IS.”
For the past 5 months the buyers have refused payment claiming certain problems with the home were never corrected within the first year warranty. However, we have evidence to show that every issue brought to our attention, regarding their problems with the home, have been resolved. (Receipts from contractors,etc.) They are in breach of contract, yet refuse to move out of the home. Their argument: “The home is fraudulent”
Due to an unresolved issue regarding the land, the property continues to be deeded in our name. The buyer never signed to have the property changed into their name. Therefore we cannot forclose on the buyer as stated in the contract. (We’d be forclosing on ourself.)
We’ve taken the matter to small claims court, only to learn that it was out of their jurisdiction. We are currently waiting on a court date for superior court.
Our question is: What rights do we have, (being that our name is on the mortgage, and the land)to remove these people from the home? So many laws are set up to protect the buyer, and it seems there is no protection for the owner in a case like this. The buyer has refused to pay for almost 6 months now. Even if the judge rules in our favor, is it true that they may be allowed to continue to live the home up to 30 days following the hearing? We are also curious if the judge can mandate that they pay us the amount they have witheld for the past 6 months. Can wages be garnished until the debt is paid?
Any answers or advice you can give us would be greatly appreciated.
Re: Owner Financing Issue - Posted by Natalie-VA
Posted by Natalie-VA on January 12, 2008 at 12:47:14:
I’m with the others. It’s not clear whether this is a lease option or contract for deed. Go with Michaela’s advice and get a lawyer. If your small claims court normally handles evictions, and they said they don’t have jurisdiction, one of the reasons might be that the judge thinks they have an equitable interest in the property. You don’t have to be on title to have an equitable interest. I wouldn’t go into court on this one alone, and I’ve done many evictions.
Let us know how this plays out. We can all learn from it.
I hate it when… - Posted by David Alexander
Posted by David Alexander on January 10, 2008 at 15:41:01:
when the seminar guys call Lease Options a wrap or tell you it’s same thing as owner financing.
First things first… if it’s jsut a lease option and done correctly… then it’s simply an eviction unless your state treats a L/O as a contract for deed or agreement for deed… they are after basically the same thing.
Some states make you go ahead and foreclose even it it’s just a Lease Option…
Now, that said…
Truth is you can’t put someone in a rental and tell them the repairs are their problem…
Yes, I know in seminar land they tell you that’s the way it is… and it works till they get an attorney involved…
So, most likely it’s just and eviction…
Why have you waited 6 months…
Re: Owner Financing Issue - Posted by Ann
Posted by Ann on January 10, 2008 at 09:57:30:
I have done a LOT of owner financing and I am not clear as to whether you “financed” it or “leased” it. You mention you did a lease purchase agreement, was it a lease with option to buy?? In either case the judge should award you the amount they withheld as a reasonable amount of “rent” because they were in your property and you should be able to garnish wages and attach to personal property to collect.
Re: Owner Financing Issue - Posted by Kristine-CA
Posted by Kristine-CA on January 10, 2008 at 09:11:25:
For anyone here to help you, you will need to post clearer, more
What state are you in?
What docs did you use to “sell” the property. You mention Lease
Purchase Agreement? Was it a Lease with Option to Purchase? You
mention mortgage, but it doesn’t sound like you have a mortgage.
Sounds like you are a landord with a tenant/buyer.
3)What is the “unresolved” issue regarding the land? Is this issue the
reason you used a Lease Purchase arrangement instead of a regular
sale. A regular sale would be you deeding the property to the buyers
and then you carrying back a mortgage. The buyer doesn’t need sign to
have a property put in their name…you do.
It sounds like you may have done this paperwork yourself and now you
are trying to resolve it on your own in the courts. This may not be the
best solution. Please post a few more specifics and you may receive
some help that is relevant. Kristine
Re: Owner Financing Issue - Posted by Dana
Posted by Dana on January 10, 2008 at 10:39:21:
What state are you in? GA
What docs did you use to “sell” the property. You mention Lease Purchase Agreement?
It is a Lease/Purchase Contract. The buyer was unable to attain permanent financing on their own.
3)Was it a Lease with Option to Purchase?
It was treated as a Lease/Purchase contract, but the buyer was informed that they would recieve the same benefits as if they had already obtained financing.
It’s described in the contract they were buying the home. “Buyer agrees to purchase and pay for upon the terms and conditions of the contract…” “Pay 12 equal installments of $1265 a month”…At the end of 12 months we intended to renew the contract in hopes that they could better their credit and obtain financing. (as long as there were no violations to the contract)
4)You mention mortgage, but it doesn’t sound like you have a mortgage. Sounds like you are a landord with a tenant/buyer.
Basically that is how we see it, but the buyer is stating that they “bought a fraudulent home” and are entitled to rights as someone who had obtained financing.
5)What is the “unresolved” issue regarding the land? Is this issue the reason you used a Lease Purchase arrangement instead of a regular sale.
The issue is the fact that we never recorded a mortgage. We have a written commitment on a lease purchase contract between seller and buyer.
At the time we felt it unnecessary to record the mortgage into their name, due to the short lapse of time that the home was to be “owner financed.”
Our main objective at this point:
We are simply unsure of the legal position this puts us in because we failed to record a mortgage.