Legal Question in Real Estate Law in California

Re: Lease option in default

This is why I dislike lease options.

The lender cannot charge a prepayment penalty if he has accelerated the loan. Other than that, you can't stop them from foreclosing. You are going to either make up back payments, and discontinue payments to the owner, or exercise the option before any foreclosure.

You might still have a claim for any damages against the seller.

Re: Lease option in default

Pay it off and sue the seller for the difference. You may contact me.

Re: Lease option in default

Certainly you have a cause of action against the seller. Act quickly so that you may place a lis pendis on the property to protect your interest.

Call me directly at (619) 222-3504.

Re: Lease option in default

If your numbers are right (and you should confirm them), you will still make a profit by exercising and re-selling, whether or not you are successful in recovering the arrearages from the owner in court or through negotiation.

Based on that, it looks as though your strategy should be to exercise the option, pay the arrearages and proceed against the owner for your losses.

Your chance of success in recovering those losses will be improved if the option contained a covenant by the owner to keep the home free from liens and encumbrances (other than the existing mortgage) and to make the payments on time; it will also help a lot if the owner is solvent and reputable, which in the circumstances may not be the case.

Re: Lease option in default

There is not quite enough information. Would need to know what the option agreement says, what was known or represented about past due amounts at time of option. You might be able to negotiate and work out matter with lender and certain other matters with seller.

JOEL SELIK

Attorney at Law

SAN DIEGO ATTORNEY AND

CA LICENSED REAL ESTATE BROKER

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Re: Lease option in default

Please call again as your number was not stored properly. JWB (619) 222-3504/(619) 501-3608.