How do I regain rights to a home I own that is under a lease option contract where the lessee is in default?

Question

I live in Utah. The Lessee has subleased or rented the property (which is ok). The lease agreement says that if the lessee doesn't make a payment, I need to send a notice of default (which I wrote up and faxed to the lessee). The lessee has 5 days to cure such default (which they haven't). Since they didn't, I now have the right to terminate all rights they have to the property. I don't necessarily want to evict the current tenant. I'm willing to write up a contract with them so they can stay. I need to know if faxing the declaration of default, that I wrote up is legal "written notice". I also need to know if there is anything else that I need to do legaly so I can bypass the lessee and go to the current tenant and sign a contract with them and just have them start paying me.

Answer 1

There are a couple of issues here. First, it's not enough to go by what the contract says, the contract must conform to the state laws. I hope you had it drawn up by a local attorney. I guess what I'm wondering is if the 5 days was a long enough timeframe.

If the fax was the personal fax number for the Lessee, it probably is enough. However, they can always claim that they received no notice. Worse, if it was an office fax number you could be in violation of Federal Law's concerning debt collection (not publishing debt to employers). It would be better to send my mail with a return receipt requested. If the lessee filed a land contract or other notice against the deed for the property you might need down the road to get clean title.

I would suggest seeing a real estate attorney.

Felicia Randall

Answer 2

Forget the faxed notice. Send them written notice by Certified Mail, Return Receipt Requested. You need proof of receipt of the notice.

If the tenant fails to make good on the agreement it gets a bit tricky. Since you do not wish to evict the current occupant you really only need send the original tenant a notice of termination of the agreement. Send a copy to the current occupant. Also contact the current occupant and work out any agreement you wish with them.

The tricky part is that your original tenant has a valid agreement with the current occupant and could proceed against them if they do not pay as agreed. For this reason, both of you need legal representation.

For future reference, if you allow a sublease, have your attorney generate a modification to the original agreement that will void the original agreement AND any subleases that the first tenant entered into if they don't pay you as agreed. That will protect both you and the sub-tenant.

Answer 3

I don't think that faxing a notice to the lessee is good enough. How do you know if they received the fax? Just because you sent it, doesn't mean that the machine on their end worked. Anyway, the thing you need to do right now is to speak with a real estate attorney. He/she needs to review your contract and guide you through the process of recouping the property.

Answer 4

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Answer 5

I'm surprised you're willing to work with them now that they are in default. I wouldn't do it. It creates a precedent and they will very likely take advantage of that again. So, talk to a real estate attorney. I think they'd tell you to evict them. The only way to guarantee that you can "prove" they got notice is to send the documents certified mail or have them delivered by a police officer (like in my state) or a process server (valid in other states). Good luck, whatever you decide.

Answer 6

Yes sometime and no other times. I put it this way because you have too many variables and legal aspects that require a lawyer. If you have no legal background in real estate law and your from Utah which will have different requirements.
I would suggest to you, stay off this site for technical legal advise. It could cost more than an attorney.