Legal Question in Real Estate Law in California

Cannot afford house

We lost our jobs and had to move. We allowed a friend to move into our home which we could no longer afford. We gave them a lease for one year ending 04/01/05 and also a fixed price on the house to buy it before then. We had a verbal agreement with them to buy the house in July, then it turned into November of last year and they still have not bought the house. They are using the one year lease agreement as agreed upon. We cannot afford to fix the problems in this home due to a small income and cannot wait till April for the lease to be up..Is there a way out of this lease due to financial situations of the owner? There are some things they have done without our approval, but I don't want to take it that far. I just want to sell our home and not have to worry about it anymore. Thank you.


Asked on 1/14/05, 5:29 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Cannot afford house

"Breaking" the lease as a landlord is not recommended; tenants have too many rights and too much power. It just wouldn't be practical (or legal) to try to evict them.

It is theoretically possible to sell a house while it's occupied by tenants. In fact, with income property (apartments, etc.) it happens all the time. The buyer takes "subject to" the existing leases.

My advice would be to talk with several good real estate brokers who operate in the community where the house is located. Get economic advice from them, such as how much would the house sell for, how much equity do you have, and what is the market for houses with existing leases?

It's possible in this market that you can find a buyer who doesn't want possession until after 4/1/05. It's only about 2-1/2 months, and often takes that long from listing to close of escrow anyway.

Assuming your mortgage is current, remember that a foreclosure takes close to four months; you may be able to sell and pay off any arrearages incurred between now and COE out of the sale proceeds.

In any event, I think you need real-estate advice as much as legal advice. Get suggestions from more than one broker, then maybe come back to LawGuru for further advice.

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Answered on 1/14/05, 5:49 pm


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