Posted by JohnBoy on December 01, 2004 at 21:01:20:
The buyer can set the deal up right in the beginning and avoid this from ever becoming a problem! NEVER, NEVER, NEVER, rely on the seller to make the payments! ALWAYS, ALWAYS, ALWAYS, make the payments yourself. Then send the seller any difference if there is any. Then you always know the payments are being made because you are the one sending them in to the bank every month.
The seller can call the banks 800 number to verify you made the payments. If you didn’t the seller could evict for breaching the contract.
If the seller has a problem with this then use a 3rd party escrow service where you send the payment to them, they then send the bank the payment and send any difference to the seller.
If a seller has a problem with any of these options then don’t do the deal! Simple!
If the seller is motivated they will go along with just about anything. If not, then they are not motivated enough. Find another deal.
You need to verify the seller isn’t making the payments. Then find out how much they are behind. Then get the seller to bring the payments current. This is unlikely since they probably won’t have the money. Then you will need to bring the payments current to protect your interest. Do not send the seller any more payments. Instead send the payments to the bank yourself. Then deduct any amount you had to pay to bring the loan current from any equity the seller may have when you exercise the option, if there is any. Otherwise you’re stuck with having to bring the payments current yourself and having to sue the seller in court to recover any loses your incurred. But this could be a waste of time and money if the seller has nothing to sue for.
In the future, never rely on sellers to make the payments. You make the payments from the rent amount and send the difference to the seller. This way you always know they are being paid on time.