dumb question - Landlord Forum thread

dumb question by Need more sleep (NH) on November 1, 2009 @21:02

I know this is probably a dumb question but I have to ask. If I am going to rent my house (can't sell outright) with a lease to purchase option what happens to the option deposit? I know the security deposit has to be in an escrow account but the option deposit would come back to me as the seller anyway, or be mine if they back out. so is there a requirement to keep the option deposit in an escrow account or can I just knock down the sales price by the amount of the option and use the option money now to pay off some bills from carrying a mortgage and rent at the same time...?

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Re: dumb question by John on November 1, 2009 @22:14	[ Reply ]
It depends on what you have in your contract. Some contracts require the option deposit to be forfiet if the tenant/buyer backs out.

Re: dumb question by Lighthope on November 2, 2009 @01:26

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Be careful. Courts are showing a particular (though not legal) hatred for these types of contracts where the tenant forfeits their option if they do not buy the house.

Make sure your contract is rock solid. And even then...pray.

Lighthope

Pearls of Wisdom - A wise man once said: I don't know.

Re: dumb question by Mark (CA) on November 2, 2009 @05:19

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I've done that.

Having them forfiet too large of a deposit is where you can get into problems.

A couple of months security as a security/option deposit seems to work well for me.

Re: dumb question by OK-LL on November 2, 2009 @07:41

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You can take an option deposit of up to 5% of the sales amount, but if you're strapped for $$, I'd put it in an escrow account. What if you have to return it to the tenant for any reason -- say the house doesn't pass inspections, doesn't qualify for lending or burns down while you're still the owner? If you're strapped, you wouldn't have the $$ to return tp tenant. I say escrow the funds until the sale consumates.

Re: dumb question