I entered into a lease purchase option in June. The property is still under construction & available Nov. 1. The seller is having trouble with the terms of his mortgage & wants me to get a mortgage now. I can't due to credit issues. At first he offered a refund of my sizeable deposit, but now he says that the terms of his mortgage might not change, but Nov. is fast approaching and he won't know for 2 weeks if he can close on the property. He also stated that my monthly payments might have to be higher than on the contract. I cannot pay more. I need my deposit to look for another place. The original agreement is in writing & states the lease/purchase commences on November 1. Do I have any legal recourse to get a refund of my deposit (the contract states it is non-refundable), since the seller does not currently own the property, there are no other witnesses on the contract and I don't think his lender knows of his intention to lease option the property?
2007-09-29 18:14:37 · 4 answers · asked by AP Fear 2 in Business & Finance ➔ Renting & Real Estate
Regardless of whether or not your contract says the deposit in "non-refundable" he doesn't have the property that you contracted for. If you want the house, tell him you want your deposit back TODAY and if the house is still available in two weeks, and you haven't made other arrangements, you'll consider it again.
If he doesn't close on the loan, it doesn't matter what the lender knows. If he does, and they think it's going to be "Owner Occupied" he's committing mortgage fraud. If he's a contractor that builds and sells houses frequently, he most likely will have the final mortgage as a NOO (non-owner occupied) property and, in that case, he's done nothing wrong.
If he doesn't have your money or another property available, I think you have a strong case. If he doesn't "cough up" your money, tell him his next conversation will be with your attorney. Then have an attorney draw up a letter demanding your money and have it sent by certified mail so he can't say he never received it.
I've done many L/Os but I'd never refuse to give someone their money back if I didn't have the property. I guess you could wait 2 weeks and see if his financing comes through. Tell him you'll only pay what you originally agreed to, though and he'll have to make up the difference, you won't do it.
Best of luck to you.
2007-09-30 07:40:08 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I would write and ask him to refund the option money based on the fact that HE changed the terms of the original agreement. I would make sure he knows that you are rescinding your contract with him based on the changes on his part. He can't hold a deposit for terms in which HE cannot deliver. and he cant deliver. You know that.
#1 he cant take a deposit to sell a property that isnt even his as of yet. You basically gave a deposit to someone who doesnt even own a house. You should have waited until Nov 1 or when he closed. This maybe fraud- flat out.
He is giving you a heads up that he cant get a mortgage on the place........he's probably not going to get the appraisal he wanted and he needs you to get a mortgage.
What this means in practical terms is that should you move in and go by the original contract.........he will likely go into foreclosure and you will lose everything you've put in to that point.
IF he wont return the deposit, I would immediately file in small claims.....which is cheap and now goes up to $7500 in our area.
Good Luck
2007-09-30 03:38:21 · answer #2 · answered by Anonymous · 0⤊ 0⤋
WOW..
non-refundable is what you agreed to.
Like many others you think that you can just make up your own rules regarding real estate transactions.
There are many people that are in trouble today because they had no idea what they were doing, and that includes you now.
Plan on losing your "sizeable deposit". If you get any of it back, you will be lucky.
You shouldn't get involved in stupid transactions without getting professional advice in advance, not looking for someone to bail you out now.
2007-09-30 02:34:46 · answer #3 · answered by CommonCents 4 · 0⤊ 1⤋
I think , to get a mortgage , you would have to ID the property ,
And he is NOT the owner .
You got yourself in a strange mess , giving $$$$ to someone who does NOT own the property .
Think YOU need an Attorney .
And I rarely say that , but this time . . .
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2007-09-30 01:29:30 · answer #4 · answered by kate 7 · 0⤊ 0⤋