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Old 07-28-2008, 07:06 PM
 
1 posts, read 3,782 times
Reputation: 10
Default Default on Lease to Purchase

We agreed to sign a lease to purchase option contract on our house in North Carolina. The lease was for 24 months (end date of April 2010) and our contract indicates that non-payment is a default on the contract. We have had correspondence with the tenants over the last month because of their late payment for July (due on July 1). They responded on numerous occassions that the payment was "in the mail" and as of mid-month, they were still occupying the house.

We learned yesterday that they have moved out of the house and according to the husband's employer, "skipped town".

I haven't contact our attorney yet who drew up the documents because honestly, I don't want to incur any more legal expenses.

However, based on our contract, the couple would be required to pay monthly rental payments until we got a new tenant and any legal fees.

I am wondering if anyone knows how much this will costs us up front to go after them and if we think they really dont have any money, is it worth it to us to try?? Has anyone else been in this same debacle??
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Old 07-29-2008, 07:07 PM
 
Location: East TN
1,023 posts, read 2,468,731 times
Reputation: 626
How much of a deposit did you get from them? Will this not cover the transition cost? As for chasing them down, do what you want, but not generally worth the cost or trouble. You're a landlord with a lease option, they have the option to buy but not the obligation.

With a lease option, you get a large down payment, then charge above the market going rate for the lease with the extra going toward their eventual purchase, this keeps the renters invested in the process.

If you don't get a large down and above average rent, then you are just a landlord and need to do the normal landlord type ways to cover your butt, ie down payment, credit checks, etc.

Good luck

Tony
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Old 07-29-2008, 07:13 PM
 
Location: East TN
1,023 posts, read 2,468,731 times
Reputation: 626
Quote:
Originally Posted by clarda00 View Post
based on our contract, the couple would be required to pay monthly rental payments until we got a new tenant
As for them under obligation to pay rent until a new tenant is found, that is true, but you are obligated to rent out the place in a timely manner, so you couldn't leave it empty for an extended period and expect a judge to make them pay rent if you're not making an honest attempt to rent the unit.

Good luck, you should be able to rent the house out, it's summer time prior to school starting again.

Tony
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Old 08-02-2008, 10:41 AM
 
Location: Raleigh, NC
122 posts, read 290,799 times
Reputation: 77
Quote:
Originally Posted by clarda00 View Post

I am wondering if anyone knows how much this will costs us up front to go after them and if we think they really dont have any money, is it worth it to us to try?? Has anyone else been in this same debacle??
If it were me, I would file a claim in small claims court in the county where the house is located. In my county, it only costs $55 to file a claim. In North Carolina, you can file for up to $5,000 in small claims court. While the court does not actually collect the money for you, you can file an application for "execution", which, if approved, will attach your old tenants wages and/or bank accounts, if they are still somewhere in the state (North Carolina is a "garnishment" state.). Also, if you win your case in small claims court, the judgement will stay on the tenant's credit reports for up to 10 years, making it very difficult for them to get future credit or rent a place from someone who does a credit check on them.
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