I am a real estate investor and I was looking into getting a property under contract and setting up a lease option with a tenant buyer. Is it true that if the tenant buyer, fails to make the monthly payment, that I would not be able to evict them and I (Or the actual owner) would be forced to go into foreclosure? If this is true, how can I protect my self, or what can I do to prevent this. I know people do lease options all the time, so this would seem like a big risk, if it was the case.
2007-08-21 13:31:01 · 7 answers · asked by Jron 2 in Business & Finance ➔ Renting & Real Estate
You have two seperate issues here. If you buy a property, you own it with all the rights to it. Once you own it, you can rent it out by giving the tenant a lease. The lease will state that the rent must be paid in full by a certain date. The lease may also state that the tenant has the option to buy the property at a price you set in the future providing they are in good standing in their tenancy, ie. up to date with the rent. If they don't pay the rent, you can evict them according to the laws of your state. Sometimes it's easy, sometimes it takes a long time. In either case, the lease should be specific and favor YOU and the terms you want. You don't need to set an option to purchase price in the lease. You will only be forced into forclosure if you cannot cover your mortgage while you own the property. How you get the money to pay the mortgage is irrelevant.
2007-08-21 13:42:47 · answer #1 · answered by lt 4 · 0⤊ 0⤋
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2016-07-19 19:01:46 · answer #2 · answered by Dante 3 · 0⤊ 0⤋
The tenant is incorrect. you're able to desire to hire a criminal expert. in case you screw up the eviction the tenant could desire to sue you, or merely stay positioned longer without paying lease. the two way, it could value so lots extra advantageous than a criminal expert. The tenant is attempting to declare that they do no longer owe lease by way of fact upkeep subjects are not shield, yet they're incorrect. IF there's a upkeep subject, the only criminal way for them to withhold lease is that in the event that they have a court order announcing they do no longer could desire to pay till the topic is resolved. Even then, they could could desire to pay lease into an escrow account and the court could carry the money till you end the upkeep.
2016-10-09 00:06:42 · answer #3 · answered by ? 4 · 0⤊ 0⤋
There is no insurance in that situation, it's caveat emptor. IF the tenant doesn't pay then you do have a legal right to kick them out. I'm going out on a limb here but I would think it would fall under the same idea of rent to own. If you're renting a tv and you don't pay, the repo men come and take the tv way usually with a sheriff.
2007-08-21 13:36:54 · answer #4 · answered by SpankyTClown 4 · 0⤊ 0⤋
If it's a lease with option to buy, it's a two part transaction. Until the leasee exercises the option to purchase, they can be evicted just like any other lease tenant.
However, if you are talking about a land contract type sale, you'd have to foreclose.
2007-08-21 13:39:02 · answer #5 · answered by bdancer222 7 · 1⤊ 0⤋
The lease option gives "ownership" rights. Speak to an attorney. Preferably a REAL ESTATE ATTORNEY! Good luck with it.
2007-08-21 13:35:48 · answer #6 · answered by helprhome 5 · 0⤊ 0⤋
Talk to the attorney you've chosen to write up your lease option contract. He (or she) will be able to answer this state-specific question of yours.
2007-08-21 13:34:56 · answer #7 · answered by teran_realtor 7 · 0⤊ 0⤋