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Author Topic: unsure what to say to tenant/buyer?  (Read 14900 times)

Offline stevie-o

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Re: unsure what to say to tenant/buyer?
« Reply #15 on: November 05, 2008, 10:22:42 am »
I did not take a separate security deposit. I took $5k down as the option premium and that was all. The contract does state specifically that the option deposit is NON REFUNDABLE if they choose not to buy the property.

My only concern is if I tell them no on giving the $5k option deposit back AND no on lowering the rent, that one of two things will happen or both:

They'll vacate and damage everything on the way out. Or they will try to sue me somehow. I don't think they have any grounds to sue, but obviously a scum lawyer would.

If they sue, I'm sure to wind up paying lawyer fees at the least, and if they leave, I have a vacancy and likely damages.


Offline propertymanager

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Re: unsure what to say to tenant/buyer?
« Reply #16 on: November 05, 2008, 10:53:14 am »
On the one hand, you give away your $5K and part of the rent.  On the other hand, they might leave; they might damage the property; and they might sue you.  I know what I'd do. 

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline RealtyRenee

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Re: unsure what to say to tenant/buyer?
« Reply #17 on: November 05, 2008, 01:18:07 pm »
I must say PropertyManager is very wise about the situation.  Follow the advice....do not give back the deposit - do not lower the rent.  (5k is almost 4 months of rent......so if they bail or wreck the place you have a cushion)

Before I did anything, I would send them a certified written letter (Faded ink is better than the best memory - and it stands up in a court of law) - In the letter I would politely thank them for expressing their concerns about x, x, and x (be specific about the requests they made), assure them you would like to cooperate and fix any issues that could be dangerous and that you would have the issues assessed by "x" date by a professional contractor.  Then I would state something along the lines of after assessing repairs, I will have them addressed and all dangerous/unsafe/unsanitary conditions will be corrected promptly. 

Leave it at that for the time being and after having the assessments done - come up with a repair plan and again submit to them in a certified written manner the findings, and the way in which you intend to conduct the repairs.  Then conduct the repairs.  Most importantly remember - do what you say you will do. 

After the repairs are conducted send a final certified letter to them - stating that the repairs were completed and  thanking them again for informing you of the issue. 

In Spring, I would ask them if they are going to excercise their option to buy or not - if no, put it in writing including a statement that when they move out if everything is in good condition you will give back their deposit - make them sign this.....then put the house on the market during the best selling season for you.


Side note - while I was repairing the place I would take pictures of current and repaired conditions - just in case they do anything to the property.......

Good Luck!


Offline Roger J

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Re: unsure what to say to tenant/buyer?
« Reply #18 on: November 05, 2008, 03:13:06 pm »
Both PM and RealtyRenee have given excellent advice.

I, too, would not give any of the option fee back, especially since it was clear that it was non-refundable.  I also would not reduce the rent (have they even paid any rent yet).

And if you've followed your landlord/tenant law/code properly, the likelihood of an attorney taking their case is slim unless they have upfront money to pay him.  Even scumbag attorneys don't work for free and they won't take a losing case without upfront money.

As long as you fix the problems NEEDING attention (follow PM's advice here), you should be fine.

Raj
www.HickoryNCHomes.com Search for all Hickory NC Homes for Sale.

Offline stevie-o

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Re: unsure what to say to tenant/buyer?
« Reply #19 on: November 05, 2008, 03:31:59 pm »
thanks guys. I'm meeting with a friend who is a contractor and has been in construction for 20 years on Saturday morning at the house. Will update you all after that.

Offline furnishedowner

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Re: unsure what to say to tenant/buyer?
« Reply #20 on: November 05, 2008, 04:41:44 pm »
Fixing the house enough to make it safe and habitable is what needs to be done.
I would take that contract to a real estate attorney and get an opinion on it. If the tenants take this further (building inspector, lawyer) it will cost you much more than the attorney's fee.

You are not in a position financially to carry on a big fight with a tenant or buyer. You need that rent coming in. See that attorney and get out of the mess as quickly as possible, even if it means giving them their option money back. You would need to keep the security deposit (don't spend it!) and yes, maybe you have to reduce their rent in order to keep them.

Furnishedowner

Offline justin0419

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Re: unsure what to say to tenant/buyer?
« Reply #21 on: November 05, 2008, 07:57:46 pm »
I think a couple of you missed the fact that he did not take a seperate security deposit from these people.  He has the option fee of $5K and that's it.  If he gives that back, he has nothing.  Yes he may "appease" the tenants by giving them their money back because they whined and changed their minds, but who should be controlling the situation here?  These people are just needling him to see how far they can get.  It started with one complaint and spread like cancer.  If these people entered the lease option with the house in the condition it's in, they should've checked it out better since they're unhappy now. 
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Offline stevie-o

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Re: unsure what to say to tenant/buyer?
« Reply #22 on: November 09, 2008, 08:27:41 pm »
Okay, so I met out there with a contactor today. The tenant comes out and tells me that the trusses are now separating from the hip beam and one of the trusses has a crack in it. None of this was like this a week and a half ago when I was out there. Regardless, my contractor told me I need to get a structural engineer out there in order to tell me if by cintering in braces to the trusses and hip beams, it will make it structurally sound; or if I have to rip everything out and get a costly roof job.

What do you think? Is that the right move? The logic there is to have a certified engineer say what is safe and what is not; so he can't argue with a contractor's opinion.

I also went and measured up the bath, in order to do a quick rehab on the shower and floor. Also took the tenant in the crawl space to show him with a level that the house was not sinking and the floors were still level. I will begin rehabbing the shower and floor in the bathroom asap.

As far as the tenant, after I told him I was going to remedy the problems and fix them, he said that the main reason they don't want to take their option is because they don't like the school district it's in - basically they signed and then found out afterwards that it was in a different district than they thought and now they are picking at things and hoping they can find a way to get their 5K deposit by coming up with problems so they can claim that's why they can't buy the house.

Offline justin0419

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Re: unsure what to say to tenant/buyer?
« Reply #23 on: November 10, 2008, 05:18:11 am »
As far as the tenant, after I told him I was going to remedy the problems and fix them, he said that the main reason they don't want to take their option is because they don't like the school district it's in - basically they signed and then found out afterwards that it was in a different district than they thought and now they are picking at things and hoping they can find a way to get their 5K deposit by coming up with problems so they can claim that's why they can't buy the house.
If they were that concerned about the school district, they could've made a couple phone calls to area schools with the address and figured out what district it fell into.  So not only did they not do their due diligence on the house, but they didn't do it on the school district either.  This is another example of people not wanting to take responbility for their mistakes.  They knew their option fee wasn't refundable if they didn't decide to buy. 
Do you have pictures of the property from before they moved in? 
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Offline propertymanager

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Re: unsure what to say to tenant/buyer?
« Reply #24 on: November 10, 2008, 07:09:23 am »
Now you know the truth.  These losers were lying all the time, just like tenants do 90% of the time.  The problem was not the house, the problem is that they simply changed their mind, again as tenants often do (which is why they are tenants).

I would be probably try to find a couple more very competent contractors and have them go look at the roof truss issue.  Hiring a structural engineer may be expensive and they may take the easy way out and tell you to rip the entire roof off and replace all the trusses or something equally ridiculous.  You need a contractor who is very experienced and that has exprience with this type of repair.

Good Luck,

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline stevie-o

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Re: unsure what to say to tenant/buyer?
« Reply #25 on: November 10, 2008, 10:18:18 am »
I'd love to not pay for a structural engineer, but my concern is that this tenant will want to argue and/or bring "his guy" out there, or worse yet, call the building inspector to look at it. These guys are seriously looking for ways to cause problems and get out, and I'm not sure how far they would go.

Offline justin0419

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Re: unsure what to say to tenant/buyer?
« Reply #26 on: November 10, 2008, 10:23:03 am »
Tell them they're free to move.  Just keep the option money.  That was for the option to buy & they're not buying.  If they want to fight for that money, they're going to have to pay to fight you.  It's going to be your word vs. theirs about their admission of what the real "issue" is, but they're the ones who signed the lease option.  If the house was *that* bad, they wouldn't have entered into an option for it.
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Offline Roger J

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Re: unsure what to say to tenant/buyer?
« Reply #27 on: November 10, 2008, 02:33:08 pm »
You definitely need to be getting attorney's advice at this point it sounds like.

That said, as above, I'd say that they are free to move as long as the property is left in the same or better shape than it was at their move-in.  In other words, you will not sue them for breach of contract if they do move.  If they agree, simply confirm that the property is in the shape you want it (visual inspection), take the keys, then hand them a moving slip (release from lease agreement).  The option can be voided but the option fee was and still is nonrefundable.

We've only heard one side of the story, but it sounds like they have a losing case which means that they would have to pay an attorney to take it.  That's not gonna happen.  And if all your paperwork is in order, if they decide to "go it alone" it should also be an open/shut case, as you've handled everything correctly.

Raj
www.HickoryNCHomes.com Search for all Hickory NC Homes for Sale.

Offline stevie-o

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Re: unsure what to say to tenant/buyer?
« Reply #28 on: November 10, 2008, 04:24:12 pm »
When I say they want to get out, I mean that they want a way out of their contract in which they get their option fee back. They have told me they don't mind staying for a year as the original lease states. They just don't want to buy the place, and are trying to find reasons why they should get their 5k back. They have basically stated that they don't want to buy a house which needs so many repairs, and also said about the school district.

Offline justin0419

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Re: unsure what to say to tenant/buyer?
« Reply #29 on: November 11, 2008, 06:00:21 am »
This once again goes back to personal accountability.  They signed your paperwork for the "option" to buy your house.  No one was going to hold a gun to their head and make them buy.  No one made them sign your lease option agreement.  They SURRENDERED their $5k as a fee to keep you from selling the house to someone else in the mean time.  Maybe their credit was bad.  Maybe they needed another year to save up some more money for a mortgage.  We don't know and you shouldn't care.  Their $5k is NOT a damage or security deposit.  If that's what they wanted, they should have rented a house or apt on a standard lease.  They didn't.  You did not provide them with a home inspection; nor should you have.  The OPTED not to get one.  If the house truly had all the problems before they moved in they're claiming it has now, they either didn't care about it or they're blind.  They had the option to get the inspection.  They probably wanted to save a few hundred bucks.  They would have a hard time explaining their case and having a judge rule in their favor.  And the thing about the school district is stupid....  Guess they're next complaint will be you didn't tell them the house was too far away from the nearest McDonald's. 
I would not give them the option fee back, but I would keep a close eye on the property after you tell them that.  Like I said, I hope you have pictures from before they moved in.
If you like rock music, check out www.Lynamsucks.com
New EP titled "Halfway to Hell" is now available!
Check out the merch store on Lynam's website.

 




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