Profile picture for lisamgal1

Can we get our "down payment" money back on a lease/option if we decide not to buy?

We signed a lease/option contract in July, 2007. The seller said he would be owner financing us, so we put $40,000 down. Then, the day we got the keys, he showed up with a lease/option contract. Since then, the house has almost gone into foreclosure 3 times. We were to buy the house by August,2009. But, the market crashed and couldn't get a loan. We asked him to extend our contract, which he said he would, but still hasn't done to this day. We continue to pay him $1,400 a month. We have no heat or A/C and the roof is leaking, and he doesn't fix anything. If we decide that we no longer want to buy the house, can we get our $40,000 back?
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January 15 - Conway
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Answers (7)

What does the contract or agreement say?
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March 02
Profile picture for sunnyview
In technical legal jargon, your cheese is blowing in the wind. You have no protection under the expired contract you describe and with nothing in writing you are likely a month to month tenant who will never see their 40K again.

Get legal advice NOW. You continuing to pay with nothing in writing is foolish. You agreeing to pay for a "new" rent to own may also be foolish unless you can get better protection under a new contract for your earnest money. My guess based on what you describe is that your 40K is long gone and the liens on the house are more than it is worth at this point.

Check with an attorney and get a preliminary title search done to see if I am right or not. I am sorry that you are in this situation, but it is not an uncommon one for lease to own buyers.
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January 15
Profile picture for wetdawgs
Take your contract to a real estate attorney.   It is probably time to move on and the deposit is gone as you failed to meet your obligations in 2009. Let us know what your attorney says.   Good luck
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January 15
Profile picture for lisamgal1
The seller told us he was going to owner finance, but then when it came down to it, he had us sign a lease option. The contract technically expired in August,2009 but he told us he would extend the contract. He still has never done that, so technically does that now make us renters since we still make the monthly payments?  He can't have it both ways. If we are renters in his eyes, then he needs to make the repairs or he needs to extend our contract like he promised. 
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January 15
I recommend you take your contract to a Real Estate attorney.  I would depend on the agreement reads and if you are getting financing when you do close and if the lender will allow it. 
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January 15
Profile picture for wetdawgs
It depends on the contract you signed.  Usually the initial payment is not refundable, nor are the monthly payments.     You mentioned "owner financing" and "lease option".  These are two very different terms, so you need to know exactly what you are involved in.

Lease option is an unusual situation for repairs.  Most often the person hoping to buy the place is responsible for repairs.    Was this addressed in the contract?  If owner financing, you are definitely responsible for repairs.     It sounds like you want the repair benefits of regular renting, but were not in a regular renting situation
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January 15
Very doubtful! The contract you signed will tell you what will happen. This is exactly why most knowledgeable agents will tell you to stay away from lease option properties.

I would recommend that you take your "agreement" to a Real Estate attorney and have him/her explain your rights to you.

Good luck!
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January 15
 
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