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The OP stated in a response that his sister "could really use the money." I think OP's goal is to not come across as an ahole, but essentially, sell the property for 90K, kick out the current tenants, and give his sister her portion of the 90K post taxes, commission to RE agent, etc. Keeping the property as a rental only affords him (and his sister) coverage of the mortgage. Even after the mortgage balance is paid off, the rental payment is not likely to provide much "income" to OP or his sister. I think in this instance they are hoping to "cash out"
What the OP doesn't realize is that several posters (that seem familiar with Indiana Law) have stated that the court will (most likely) side with the current tenants in that they have already paid (approx.) the full "value" of the home between rent (to own) payments and the initial $20k. Most judges I think would see the "rent" payments (as it was a rent to OWN situation) as going (at least in part) towards the Principal of the property.
Nonsense. Anywhere. Rent is rent. Any credit for the rent would be in the terms set in the contract. No terms no credit. This is not hard stuff. Rent to Own has been a massive rip off in the midwest for years.
Nonsense. Anywhere. Rent is rent. Any credit for the rent would be in the terms set in the contract. No terms no credit. This is not hard stuff. Rent to Own has been a massive rip off in the midwest for years.
You got one part right, it is a rip off. (Not the OP as he clearly stated he isn't doing anything until he speaks with them rather than just putting a for sale sign in the yard)
Nonsense. Anywhere. Rent is rent. Any credit for the rent would be in the terms set in the contract. No terms no credit. This is not hard stuff. Rent to Own has been a massive rip off in the midwest for years.
OP clearly states this is a rent to own agreement with a 20k down payment. A simple rental agreement would of included a $2000 security deposit... Apples and Oranges....
OP clearly states this is a rent to own agreement with a 20k down payment. A simple rental agreement would of included a $2000 security deposit... Apples and Oranges....
A rent to own is a classical rip off mostly. They can be real but they generally favor the LL. It is a version of a lease where, in return for a payment, a tenant is granted the right to buy a home. It may or may not fix the sale price and credit the tenant with some part of his rent as a further payment. It does not have to credit anything...it is what is in the contract that determines that. If there is nothing in the contract there is no credit. He may simply have paid 20K to buy the farm when he could get financing.
A rent to own is a classical rip off mostly. They can be real but they generally favor the LL. It is a version of a lease where, in return for a payment, a tenant is granted the right to buy a home. It may or may not fix the sale price and credit the tenant with some part of his rent as a further payment. It does not have to credit anything...it is what is in the contract that determines that. If there is nothing in the contract there is no credit. He may simply have paid 20K to buy the farm when he could get financing.
Rip off or not, when contained within a binding contract, a RTO agreement is binding. A standard Option Consideration is 2-7% (the Tenant Buyers paid 25%.) Option Considerations are given back (100%) at purchase with the monthly lease payment being credited at 50% of payment.
Even if the simple contract lacked those exact terms, I can not see a judge not enforcing the standard in a situation where the Seller is trying to list/sell. Indiana Law states that the contract is automatically renewed with each monthly payment accepted.
Opinions, beliefs, and emotions have no place in a court of law...
Rip off or not, when contained within a binding contract, a RTO agreement is binding. A standard Option Consideration is 2-7% (the Tenant Buyers paid 25%.) Option Considerations are given back (100%) at purchase with the monthly lease payment being credited at 50% of payment.
Even if the simple contract lacked those exact terms, I can not see a judge not enforcing the standard in a situation where the Seller is trying to list/sell. Indiana Law states that the contract is automatically renewed with each monthly payment accepted.
Opinions, beliefs, and emotions have no place in a court of law...
Cite the Indiana Statute. I flatly don't believe you.
This whole thread has been cringe-worthy. Lots of speculation and false assumptions.
The situation depends entirely on the written (not informal) contract. If the OP cares to share the details, maybe some will be able to offer meaningful suggestions.
One thing I will note is that you need to get a better indication of the value of the property. Tax assessments are notoriously bad at indicating market value. The assessment could, in fact, be close...but don't rely on it.
Otherwise, lacking further information, there's not too much to say. But IF they paid $20K initially...and IF no part of the rental payments were credited towards the purchase price...then they really entered into a bad contract. Depending upon how generous you're feeling during this holiday season, you may want to consider refunding $20K (or a portion thereof) to them upon sale of the property. That would give them reason to cooperate and would make their lives--and yours--easier.
But if you can still arrange a sale to them, that would be even better. Best wishes.
Rip off or not, when contained within a binding contract, a RTO agreement is binding. A standard Option Consideration is 2-7% (the Tenant Buyers paid 25%.) Option Considerations are given back (100%) at purchase with the monthly lease payment being credited at 50% of payment.
Even if the simple contract lacked those exact terms, I can not see a judge not enforcing the standard in a situation where the Seller is trying to list/sell. Indiana Law states that the contract is automatically renewed with each monthly payment accepted.
Opinions, beliefs, and emotions have no place in a court of law...
Quoting the OP in his original post: "They did an informal contract in 1999, hand written with the people living on the farm in Indiana."
No one on this thread, unless he/she is a practicing probate or real estate attorney in Indiana, can possibly give a valid opinion on this situation.
This was a loosely worded agreement with money exchanged between the owner and the folks living in the house at the time. These were/are farm folks, probably friends, doing business supposedly in good faith. There are issues here of rights of survivorship, and whether or not there was a will.
I think the OP has been told a sufficient number of times that, instead of getting his shorts in a wad and insulting helpful posters, he needs to get a reputable Indiana attorney, and possibly one in Kentucky as well (as I recall, he didn't say whether the contract was signed in Kentucky or Indiana.)
Quoting the OP in his original post: "They did an informal contract in 1999, hand written with the people living on the farm in Indiana."
No one on this thread, unless he/she is a practicing probate or real estate attorney in Indiana, can possibly give a valid opinion on this situation.
This was a loosely worded agreement with money exchanged between the owner and the folks living in the house at the time. These were/are farm folks, probably friends, doing business supposedly in good faith. There are issues here of rights of survivorship, and whether or not there was a will.
I think the OP has been told a sufficient number of times that, instead of getting his shorts in a wad and insulting helpful posters, he needs to get a reputable Indiana attorney, and possibly one in Kentucky as well (as I recall, he didn't say whether the contract was signed in Kentucky or Indiana.)
Y'all have a great day and a Merry Christmas.
And what you are missing is that there may well be no lawyer in Kentucky or Indiana who knows either.
Informal contracts well outside their intended temporal frame and with multiple missed requirements are often impossible to interpret.
The first step is to determine what the tenants want and expect. That, combined with the actual details of the contract determine whether a simple meeting of the minds is or is not possible
If there is no practical compromise it is then the lawyers. And at that point you have reached the unfortunate situation where the majority of the value of the property will end up with the lawyers.
And worse there is substantial risk that an adverse ruling could not only cost the property but large sums on top of that to pay the winners legal costs.
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