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Why didn't I win my lawsuit to get $5000 lease option back?

By
Real Estate Agent with Windermere Prestige Properties S.74766

Does anyone know because i sure don't!  Pleae refer to my blog before for more details regarding this.  We went to court in November and the judge said he needed up to 2 weeks to decide.  We received our answer in February that we were to recover nothing!!!!  I at least thought if it was taking the judge this long to respond, we were going to get back something, but to wait over 3 months to get zero???  We also did not get any reason why we received nothing back of our $5000 lease option, although the owners never disclosed a construction defect that made it near impossible to finance with less than 20% down (which we didn't have and ended up buying FHA with Nehemiah).  We are still just dumb founded that owners can hide the fact that a property has construction defects (we had received letters posted on our door stating there were life threatening electrical issues within our condo building from the construction co. and the sellers had supplied us with 1 year old HOA docs that conveniently did not mention any suits) and take 5k from average joe hard working people with no laws or consequences.  With any regular real estate transaction, you would get your butt sued and rightly so, but somehow if you are trying to lease to own you are made to feel less and inadequate by the justice system because there was no actual "purchase agreement" and only a "lease option". 

Someone once described a lease option to me as an "extended escrow", where you are able to feel out the place first.  But a lease option spells out the terms almost as good as a purchase agreement.  Yet, the judicial system does not see it this way- at least not in Nevada.  If someone has anymore info that help clear this mystery to me I would appreciate it, because right now I am still unsure what tipped the scales in the owners favor.

Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

I am sorry it ended this way Cynthia.  That completely bites!  Condos are virtually unfinanceable now due to other reasons than construction defect and Nehemiah is gone.  One would think that they would have to give the construction defect disclosure with the option to purchase.  That is just plain awful that you lost the money and were taken for a ride.  I am sorry to hear this!

May 09, 2009 01:43 PM
TIMOTHY LAMBDIN
Ferrari-Lund Real Estate - Reno, NV
Lambdin Real Estate Group

HI Cynthia,

I have done lease-options since the beginning of my career over 30 years ago, and have found them to be a very effective way of buying and selling property, both land and homes. I think the biggest problem I can decipher from your case is that the disclosure was not made, and no title report was produced, which covered up the problem. If there was an agent involved, I would go after his errors and omissions insurance, or just damages on the lack of disclosure. That doesn't violate the "option consideration" being non-refundable. Maybe that's what the judge hung his decision on.

Really, a lease option, if done right, with supporting documents, and proper buyer due-diligence can be effective these days. I would be glad to send you one I just did for reference, with all the names and addresses blotted out, for an example of what I do. The standard form in zipforms is the one I use, but followed up with the O&A, and an addendum or two. The addendum is the important language.

What happens if the seller quits making payments? Doesn't pay taxes? Re-fi's the property for more than your lease-option? These things can happen. Never simplify deals. Complicate them with every possible scenerio, to cover yourself. Even I make big mistakes from time to time. This business is just running away at breakneck speed, and we all lose, except the banks, of course.

Just check this link out, to see just what we are up against.

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/886647

 

In any case, good luck in the future, and I hope you can justify the rent at the lease-option.

Tim Lambdin

Feb 10, 2010 01:00 PM