Landlord is Trying to Break My "Lease with Option to Buy" for more $$
August 11, 2015 8:29 AM Subscribe
First off, you are not my lawyer.
I have a contract with my landlord that states "The landlord agrees to give the tenant an exclusive option to buy this property for the following price and terms: $XXX,XXX. Tenant must be pre qualified on or before April 1, 2016."
She calls me yesterday and says the place above me sold for 60K more than mine (and the place above is the same as mine). And that she's sorry but it's been a good run and she'll lookout for me that I don't have to leave right away.
She didn't mention our contract once.
Her and I have been on very good terms (we have lunch together even) since I got the place two and a half years ago. She had moved and state that she didn't want to make any money or even involve a a real estate agent. So we signed this contact 4 months ago.
The town I live in is blowing up real-estate wise (Denver, CO). People are showing up to listings with cash, paying thousands over asking cost. She tells me that she was approached and that this deal will move quickly but that she wants to be "open and honest and upfront" with me and not just sell it without my knowledge.
Again, she didn't mention our notarized contact one time.
I has been my dream to own this place and I've been working on getting my credit up and bills paid to be ready in April. I'm heartbroken and feel that I am either owed the option to buy or some of the income I will be missing out on since the sale will be tens of thousands more than my price.
I hate to be the bad guy and completely poison this nice relationship I've had with her, but I feel that I'm being screwed for money. I think I'm going to see a lawyer today. Can anyone recommend any other considerations I should make?
Her and I have been on very good terms (we have lunch together even) since I got the place two and a half years ago. She had moved and state that she didn't want to make any money or even involve a a real estate agent. So we signed this contact 4 months ago.
The town I live in is blowing up real-estate wise (Denver, CO). People are showing up to listings with cash, paying thousands over asking cost. She tells me that she was approached and that this deal will move quickly but that she wants to be "open and honest and upfront" with me and not just sell it without my knowledge.
Again, she didn't mention our notarized contact one time.
I has been my dream to own this place and I've been working on getting my credit up and bills paid to be ready in April. I'm heartbroken and feel that I am either owed the option to buy or some of the income I will be missing out on since the sale will be tens of thousands more than my price.
I hate to be the bad guy and completely poison this nice relationship I've had with her, but I feel that I'm being screwed for money. I think I'm going to see a lawyer today. Can anyone recommend any other considerations I should make?
Response by poster: Thanks. I think the hard part for me is I'm totally not the type of person to go aggressive like this. It pains me to poison our relationship and and become litigious. I'm the gentle type that thinks we can all be reasonable and kind.
What's harder is when she called me with this news, she took the kind, friendly tone like she's looking out for me. I guess that makes it even worse in a way. Thanks for the support. I think I need to feel like I'm not being a dick.
posted by tunewell at 8:38 AM on August 11, 2015
What's harder is when she called me with this news, she took the kind, friendly tone like she's looking out for me. I guess that makes it even worse in a way. Thanks for the support. I think I need to feel like I'm not being a dick.
posted by tunewell at 8:38 AM on August 11, 2015
You signed this contract 4 months ago? How much could the market possibly have changed in 4 months? Consult your lawyer, enforce the contract. Maybe the landlord made a bad decision in signing it but that is in no way your fault and considering it was so recent I wouldn't feel guilty at all. It's not like they signed it 2 years ago and then the market blew up and they're missing out. Stand up for yourself.
posted by Wretch729 at 8:39 AM on August 11, 2015 [6 favorites]
posted by Wretch729 at 8:39 AM on August 11, 2015 [6 favorites]
Best answer: Enforce the contract. You're not being aggressive - SHE is. You're responding based on something that the two of you agreed to. She's the one breaking the deal.
posted by entropone at 8:42 AM on August 11, 2015 [46 favorites]
posted by entropone at 8:42 AM on August 11, 2015 [46 favorites]
What exactly did you give *her* in exchange for this contract? Because her writing down a promise to give you something with no benefit accruing to her is not inherently a contract. Notarizing it might make it one, depending on the form of the agreement.
posted by jacquilynne at 8:42 AM on August 11, 2015 [3 favorites]
posted by jacquilynne at 8:42 AM on August 11, 2015 [3 favorites]
I'm not clear on how you are getting financially screwed here. You don't own the place so you weren't promised any money on its sale. Furthermore, it sounds like you are in a better financial position now since you say you have been working on your credit and paying off bills.
You need to get this thought out of your brain. The only thing you are owed is the right to adhere to the contract you both signed. This is what a lawyer is for. It doesn't make you a bad person. The job of a lawyer is to represent the law.
posted by joan_holloway at 8:44 AM on August 11, 2015 [1 favorite]
You need to get this thought out of your brain. The only thing you are owed is the right to adhere to the contract you both signed. This is what a lawyer is for. It doesn't make you a bad person. The job of a lawyer is to represent the law.
posted by joan_holloway at 8:44 AM on August 11, 2015 [1 favorite]
Best answer: From the tone of your question I doubt if you brow-beat her into signing the option agreement. She apparently thought it was a good thing for her when she signed. The fact that the agreement is notarized is evidence of the fact it was a serious agreement.
Act quickly to let her know you intend to hold her to the agreement, either directly or through your attorney. It is in everyone's interest to not have her enter into a sale agreement with a third party which may need to be set aside, resulting in more frustration and expense for all, especially her.
posted by uncaken at 8:46 AM on August 11, 2015 [5 favorites]
Act quickly to let her know you intend to hold her to the agreement, either directly or through your attorney. It is in everyone's interest to not have her enter into a sale agreement with a third party which may need to be set aside, resulting in more frustration and expense for all, especially her.
posted by uncaken at 8:46 AM on August 11, 2015 [5 favorites]
Nope nope nope. Contract contract contract. Lawyer lawyer lawyer.
posted by thomas j wise at 8:47 AM on August 11, 2015 [8 favorites]
posted by thomas j wise at 8:47 AM on August 11, 2015 [8 favorites]
Response by poster: Another question: Should I remind her of our contract (that she either conveniently or honestly forgot to even address in our conversation) or just talk to a lawyer and proceed from there. A lawyer friend tells me to just talk to the lawyer and don't contact her. That's hard for me to do but seems like it might be prudent.
posted by tunewell at 8:50 AM on August 11, 2015
posted by tunewell at 8:50 AM on August 11, 2015
To put it more eloquently: the lawyer will tell you what your rights are here--whether the contract is legally enforceable &c. (For example, it may or may not make a difference that this doesn't appear to be a lease-to-buy arrangement, in which you have already paid a down payment and monthly option fees.) As your lawyer friend suggests, you should not contact the LL again without speaking to the lawyer first.
posted by thomas j wise at 8:53 AM on August 11, 2015 [9 favorites]
posted by thomas j wise at 8:53 AM on August 11, 2015 [9 favorites]
Did you actually pay her a fee to purchase the option? Otherwise I don't think its legally binding.
posted by cakebatter at 8:54 AM on August 11, 2015 [1 favorite]
posted by cakebatter at 8:54 AM on August 11, 2015 [1 favorite]
MeMail me if you would like a recommendation of a Denver attorney.
posted by Sheppagus at 8:54 AM on August 11, 2015
posted by Sheppagus at 8:54 AM on August 11, 2015
Definitely talk to an attorney, but it's probably a good idea to talk to your landlord first and remind her of your agreement. I find that the least aggressive way to discuss something like this is to feign confusion and ask for clarification like "You mentioned you were going to sell the house, what does that do to the option to buy I have in the lease?"
posted by unreasonable at 8:55 AM on August 11, 2015 [1 favorite]
posted by unreasonable at 8:55 AM on August 11, 2015 [1 favorite]
Response by poster: Did you actually pay her a fee to purchase the option? Otherwise I don't think its legally binding.
Just under the quote I put in my post is this:
"12.03% of the amount that the Tenant pays the Landlord as rent under this lease will be held as a deposit and credited against the purchase price of this property if this option is exercised by the Tenant. If the option is not exercised, the Landlord will retain all of these payments as rent under this Lease."
posted by tunewell at 8:59 AM on August 11, 2015 [2 favorites]
Just under the quote I put in my post is this:
"12.03% of the amount that the Tenant pays the Landlord as rent under this lease will be held as a deposit and credited against the purchase price of this property if this option is exercised by the Tenant. If the option is not exercised, the Landlord will retain all of these payments as rent under this Lease."
posted by tunewell at 8:59 AM on August 11, 2015 [2 favorites]
Oh man well yeah, lawyer up! That is some real bullshit.
posted by cakebatter at 9:00 AM on August 11, 2015 [19 favorites]
posted by cakebatter at 9:00 AM on August 11, 2015 [19 favorites]
I would respond with something like this.
"Thank you for notifying me of your desire to sell the apartment. I would like to remind of you of the contract we signed X Date (see attached - attach a scanned copy of the contract). I would like to exercise the option we agreed to and am moving forward with arranging to do so."
Then all future communications can go through your lawyer.
Be polite and professional at all times and you will not be responsible for "poisoning a relationship."
posted by brookeb at 9:03 AM on August 11, 2015 [3 favorites]
"Thank you for notifying me of your desire to sell the apartment. I would like to remind of you of the contract we signed X Date (see attached - attach a scanned copy of the contract). I would like to exercise the option we agreed to and am moving forward with arranging to do so."
Then all future communications can go through your lawyer.
Be polite and professional at all times and you will not be responsible for "poisoning a relationship."
posted by brookeb at 9:03 AM on August 11, 2015 [3 favorites]
Consider that you can talk to a lawyer and after that start out pretty gentle: "Friend, I wanted to talk to you about the agreement we signed last spring. When you let me know that you were planning on selling, I went back and looked at it to see what it said. I wasn't sure how your decision to sell fit in with it, so I double-checked with a lawyer and [....]. I'd still really like to buy, and it looks like our agreement is legally binding. What are you thinking?" If she wants to preserve the friendship and has somehow gotten confused about things, this gives her space to back up a little. You don't need to talk to a lawyer and then serve her with a lawsuit with no intervening conversation (unless so advised by the lawyer, of course).
posted by Frowner at 9:05 AM on August 11, 2015 [12 favorites]
posted by Frowner at 9:05 AM on August 11, 2015 [12 favorites]
Lawyer sounds like the best bet.
I'd suggest thinking about what would be acceptable outcomes if it is enforceable and you proceed. Like if the landlord offers to buy you out of the contract what would that take to be acceptable to you etc. Your lawyer will probably ask you about that, so ponder it a bit before your consult.
posted by under_petticoat_rule at 9:06 AM on August 11, 2015 [1 favorite]
I'd suggest thinking about what would be acceptable outcomes if it is enforceable and you proceed. Like if the landlord offers to buy you out of the contract what would that take to be acceptable to you etc. Your lawyer will probably ask you about that, so ponder it a bit before your consult.
posted by under_petticoat_rule at 9:06 AM on August 11, 2015 [1 favorite]
Even though you're gentle and even though you don't want to poison your relationship, you can and should talk to a lawyer before you have any further communications with your landlord. As Frowner says, you can talk to a lawyer AND have a gentle conversation with her, but if you want to buy this place, any further contact you have with her now could jeopardize that and/or make potential litigation longer and costlier. Lawyer lawyer lawyer NOW.
Get recommendations from friends, check them out on Avvo and the bar to make sure they don't have any violations, etc. You want someone local who does a lot of real estate law. IANAL, IANYL.
posted by purple_bird at 9:13 AM on August 11, 2015 [8 favorites]
Get recommendations from friends, check them out on Avvo and the bar to make sure they don't have any violations, etc. You want someone local who does a lot of real estate law. IANAL, IANYL.
posted by purple_bird at 9:13 AM on August 11, 2015 [8 favorites]
Response by poster: Yep. i have an appointment today here:
http://www.culpepperlaw.us/practice-areas/real-estate/
I will only contact her with the above suggestion AFTER my consultation. I'd like to be able to mention the contract to her (after consultation) so it comes initially from me, being reasonable. Then it's up to her to get harsh.
posted by tunewell at 9:17 AM on August 11, 2015 [5 favorites]
http://www.culpepperlaw.us/practice-areas/real-estate/
I will only contact her with the above suggestion AFTER my consultation. I'd like to be able to mention the contract to her (after consultation) so it comes initially from me, being reasonable. Then it's up to her to get harsh.
posted by tunewell at 9:17 AM on August 11, 2015 [5 favorites]
She's poisoning the relationship by taking advantage of you.
Don't talk to her as you might say something that could prove consequential later.
Talk to a lawyer.
posted by French Fry at 9:17 AM on August 11, 2015 [7 favorites]
Don't talk to her as you might say something that could prove consequential later.
Talk to a lawyer.
posted by French Fry at 9:17 AM on August 11, 2015 [7 favorites]
Best answer: You know what, this is business, not personal. She is looking to break the contract because she thinks that will be more profitable for her. It certainly will be a great deal for her if she can smile you out of the place. You need legal advice as to whether you can get specific performance of your option contract (i.e., require her to abide by it.) And also what it will cost you to enforce the contract.
I'd be perfectly friendly to her, and let your lawyer do the talking if you and lawyer decide to enforce your option. Don't discuss the property or the contract with her -- tell her you are letting your lawyer handle that.
On the personal front . . . enforcing a contract is not "being litigious." It just means you aren't going to be a doormat. She is not truly your friend, but her own. As for you, only you can look out well for your own personal interests.
posted by bearwife at 9:24 AM on August 11, 2015 [25 favorites]
I'd be perfectly friendly to her, and let your lawyer do the talking if you and lawyer decide to enforce your option. Don't discuss the property or the contract with her -- tell her you are letting your lawyer handle that.
On the personal front . . . enforcing a contract is not "being litigious." It just means you aren't going to be a doormat. She is not truly your friend, but her own. As for you, only you can look out well for your own personal interests.
posted by bearwife at 9:24 AM on August 11, 2015 [25 favorites]
Good move contacting a lawyer. The reason for this is because we don't have the experience or the temperament to handle the negotiation and enforcement of contracts. That's why we hire lawyers to do it for us, because they have the knowledge and experience of how to do so because they have done it every day for decades. You don't know how to do this (as your questions are about "how do I address this with the landlord?") , and for the lawyer, it's not personal. You're doing the right thing.
posted by deanc at 9:24 AM on August 11, 2015 [3 favorites]
posted by deanc at 9:24 AM on August 11, 2015 [3 favorites]
Great that your contacting a lawyer, but I want to point out that her looking-out-for-you-all-sweet act is surely her attempt to create a relationship-tone where you don't attempt to enforce the contract. She didn't bring up the contract because she didn't want to draw attention to it. She didn't say "Nevermind, I'm kicking you out and selling the place. So sad; too bad." because she didn't want to provoke a fight.
I don't mean to say that she's an awful person out to get you. She's probably not. But if you were her and you wanted to sell the place for a higher price instead (not an unreasonable thing to want), wouldn't you behave exactly as she behaved? Everyone knows you catch more flies with honey than vinegar. Don't feel like you have roll over or tread meekly just because she offered you honey and isn't that nice of her to offer you honey.
posted by If only I had a penguin... at 9:39 AM on August 11, 2015 [1 favorite]
I don't mean to say that she's an awful person out to get you. She's probably not. But if you were her and you wanted to sell the place for a higher price instead (not an unreasonable thing to want), wouldn't you behave exactly as she behaved? Everyone knows you catch more flies with honey than vinegar. Don't feel like you have roll over or tread meekly just because she offered you honey and isn't that nice of her to offer you honey.
posted by If only I had a penguin... at 9:39 AM on August 11, 2015 [1 favorite]
You can talk to a lawyer and still be the one to send her the next email; just run it by them first. She doesn't have to know lawyers are involved yet. (She might have one telling her what to say, too.) The more you handle yourself, the less this will cost you. Lawyers get expensive fast. There nothing about understanding your options that is aggressive. But do learn what it might take, in terms of time and money, to enforce the contract (if it can be enforced).
posted by slidell at 9:40 AM on August 11, 2015
posted by slidell at 9:40 AM on August 11, 2015
Just want to point out that this is the whole idea behind an option. You make an agreement about a future price and someone wins and someone loses. So sorry that she didn't understand her rights and obligations when she signed the contract, but that's why people have attorneys review their contracts before signing them.
Yes yes a million times yes to finding an attorney.
posted by janey47 at 9:41 AM on August 11, 2015
Yes yes a million times yes to finding an attorney.
posted by janey47 at 9:41 AM on August 11, 2015
You almost certainly are not going to be litigious (ie, have a lawsuit), as those cost money. You want to negotiate, with the backing and careful wording of a lawyer (since this involves a legal contract). Be sure to discus with your lawyer what you want out of this, and what the pros and cons of those options are. Do you want, to buy the place? What happens if you can't get approved for a loan? Do you want to be paid for giving up your right to buy the place? How much money should you accept?
posted by Phredward at 9:41 AM on August 11, 2015 [2 favorites]
posted by Phredward at 9:41 AM on August 11, 2015 [2 favorites]
Response by poster: Do you want to be paid for giving up your right to buy the place? How much money should you accept?
Is this an amount the lawyer can advise on? Can I trust their number since they are most likely benefitting as well?
Consider that the place could probably instantly sell for 60K more than the price in the contract.
I have no idea what's reasonable.
posted by tunewell at 9:47 AM on August 11, 2015
Is this an amount the lawyer can advise on? Can I trust their number since they are most likely benefitting as well?
Consider that the place could probably instantly sell for 60K more than the price in the contract.
I have no idea what's reasonable.
posted by tunewell at 9:47 AM on August 11, 2015
Once someone in a relationship starts to screw you over, as she is trying to, the relationship is almost never salvageable. So, as much as you want to be a nice, kind person, you have nothing to gain here. Instead, be honest and civil, and take care of yourself. This is not the same as screwing her, it's just being fair.
posted by theora55 at 9:47 AM on August 11, 2015
posted by theora55 at 9:47 AM on August 11, 2015
This sounds like breach of contract to me. Get yourself a lawyer and make your landlord abide by the terms of your contract.
posted by tckma at 9:48 AM on August 11, 2015
posted by tckma at 9:48 AM on August 11, 2015
As to how much to accept to give up your right to purchase, consider that $59k still gives her a profit. Anything under $60K is gravy to her. Your lawyer may (or may not) be able to advise on how much to ask for. A financial adviser might be able to give you a valuation figure and the lawyer may be able to negotiate and write a binding contract.
posted by janey47 at 9:50 AM on August 11, 2015
posted by janey47 at 9:50 AM on August 11, 2015
Consider that the place could probably instantly sell for 60K more than the price in the contract.
I have no idea what's reasonable.
This is never a given. Do enforce your rights but also know there is often no rhyme or reason to what someone pays for a piece of real estate. The price someone paid for that condo is a piece of data.
posted by readery at 9:51 AM on August 11, 2015 [1 favorite]
I have no idea what's reasonable.
This is never a given. Do enforce your rights but also know there is often no rhyme or reason to what someone pays for a piece of real estate. The price someone paid for that condo is a piece of data.
posted by readery at 9:51 AM on August 11, 2015 [1 favorite]
"12.03% of the amount that the Tenant pays the Landlord as rent under this lease will be held as a deposit and credited against the purchase price of this property if this option is exercised by the Tenant. If the option is not exercised, the Landlord will retain all of these payments as rent under this Lease."
Yikes!!! My first response to you should now be in ALL CAPS. Glad to hear you're going to see a lawyer.
posted by thomas j wise at 10:04 AM on August 11, 2015 [3 favorites]
Yikes!!! My first response to you should now be in ALL CAPS. Glad to hear you're going to see a lawyer.
posted by thomas j wise at 10:04 AM on August 11, 2015 [3 favorites]
Can you perform (buy the place) if you exercise your option now? If not, I would act like I could and negotiate for between 33% and 50% of the value of the sale above the option price. If I could, I would just buy the place.
I am having a hard time figuring out what your risk was in this case. Normally, an option costs money. Even with your additional information, I don't see the cost to you. I think the 12.05% of the rent is what she might be required to pay back if you were usurped with your option. If you cannot afford to exercise the option, then ir was not exercised. If you can afford to exercise, then do so.
But, I am not a lawyer. Talk to yours. Good luck.
posted by AugustWest at 10:06 AM on August 11, 2015
I am having a hard time figuring out what your risk was in this case. Normally, an option costs money. Even with your additional information, I don't see the cost to you. I think the 12.05% of the rent is what she might be required to pay back if you were usurped with your option. If you cannot afford to exercise the option, then ir was not exercised. If you can afford to exercise, then do so.
But, I am not a lawyer. Talk to yours. Good luck.
posted by AugustWest at 10:06 AM on August 11, 2015
Jesus, it's like a contracts final. Consideration, pre-existing duty, and so on.
Yeah, be a hardass about this. Get a lawyer, let him or her be the bad guy.
posted by jpe at 10:08 AM on August 11, 2015
Yeah, be a hardass about this. Get a lawyer, let him or her be the bad guy.
posted by jpe at 10:08 AM on August 11, 2015
(and let him or her sort through the pretty odd issues here)
posted by jpe at 10:09 AM on August 11, 2015
posted by jpe at 10:09 AM on August 11, 2015
Response by poster: If you cannot afford to exercise the option, then ir was not exercised. If you can afford to exercise, then do so.
Not sure I can exercise the option immediately but the contract states:
"Tenant must be pre qualified by April 2016."
Are you saying I don't have that time to get ready?
posted by tunewell at 10:10 AM on August 11, 2015
Not sure I can exercise the option immediately but the contract states:
"Tenant must be pre qualified by April 2016."
Are you saying I don't have that time to get ready?
posted by tunewell at 10:10 AM on August 11, 2015
Your job in life is to take care of YOU and YOUR interests. Your landlord has no interest in taking care of you OR your interests.
Good for you for getting a lawyer. It is absolutely ok to be the "bad guy" to take care of yourself.
(My sister is the nicest person I know and had to sue a former roommate for thousands of dollars the roommate stole. My sister needed the money back to do things like pay the rent and turn the utilities back on. Did this make her a bad person? Nope, still the nicest person I know, but it was a huge lesson in taking care of herself.)
posted by Ms Vegetable at 10:11 AM on August 11, 2015
Good for you for getting a lawyer. It is absolutely ok to be the "bad guy" to take care of yourself.
(My sister is the nicest person I know and had to sue a former roommate for thousands of dollars the roommate stole. My sister needed the money back to do things like pay the rent and turn the utilities back on. Did this make her a bad person? Nope, still the nicest person I know, but it was a huge lesson in taking care of herself.)
posted by Ms Vegetable at 10:11 AM on August 11, 2015
tunewell -- n'thing what everyone else said about a lawyer but, if you're seriously considering buying your apartment, it might be worthwhile checking property tax records for other units in your building to make sure your landlord isn't bluffing about the $60k increase in value over your agreement. Heck I'd even consider spending a few hundred to have your place appraised to ensure your buy option is priced at a fair market value.
posted by nathan_teske at 10:16 AM on August 11, 2015 [1 favorite]
posted by nathan_teske at 10:16 AM on August 11, 2015 [1 favorite]
Eight months is more than enough time to prequalify for something.
Hell, I bet if you called a mortgage broker and said "give me the crappiest mortgage you have!" you could qualify pretty easily. Does the contract specify the date the purchase has to be consumated?
posted by JoeZydeco at 10:17 AM on August 11, 2015 [1 favorite]
Hell, I bet if you called a mortgage broker and said "give me the crappiest mortgage you have!" you could qualify pretty easily. Does the contract specify the date the purchase has to be consumated?
posted by JoeZydeco at 10:17 AM on August 11, 2015 [1 favorite]
Response by poster: make sure your landlord isn't bluffing about the $60k increase in value over your agreement.
I found out how much the unit above sold for even before she did. It's part of why I was so happy with my path. So I know she's not bluffing. I'm not kidding about Denver. It's blowing up beyond belief. There are lines of people at listings with offers in hand. This is also driving rent prices up as well. It's a big deal here.
posted by tunewell at 10:20 AM on August 11, 2015
I found out how much the unit above sold for even before she did. It's part of why I was so happy with my path. So I know she's not bluffing. I'm not kidding about Denver. It's blowing up beyond belief. There are lines of people at listings with offers in hand. This is also driving rent prices up as well. It's a big deal here.
posted by tunewell at 10:20 AM on August 11, 2015
Response by poster: Does the contract specify the date the purchase has to be consumated?
Just that I be prequalified by April 2016. This lease goes to the end of March.
posted by tunewell at 10:22 AM on August 11, 2015
Just that I be prequalified by April 2016. This lease goes to the end of March.
posted by tunewell at 10:22 AM on August 11, 2015
It's interesting how the contract says that you give up the deposit if you back out and choose not to exercise the option. Nothing about what happens if you choose to exercise the option and *she* backs out. The lawyer should be able to clear this up for you.
posted by SillyShepherd at 10:22 AM on August 11, 2015
posted by SillyShepherd at 10:22 AM on August 11, 2015
Are you saying I don't have that time to get ready?
I am saying it is not clear that you do. Are you saying that the owner/landlord agreed to not sell the house before then or that you have a right to exercise on or before April 2016? What consideration did you give the owner for not being able to sell for that period of time? As I read it, you have an exclusive right to buy at that price any time before April 2016, but you would need to exercise and perform; the owner can find an alternative buyer in the interim.
I personally think it is going to be a legal battle and the best course of action is for a compromise of some portion of the amount the apartment is sold for above your option strike price.
posted by AugustWest at 10:23 AM on August 11, 2015
I am saying it is not clear that you do. Are you saying that the owner/landlord agreed to not sell the house before then or that you have a right to exercise on or before April 2016? What consideration did you give the owner for not being able to sell for that period of time? As I read it, you have an exclusive right to buy at that price any time before April 2016, but you would need to exercise and perform; the owner can find an alternative buyer in the interim.
I personally think it is going to be a legal battle and the best course of action is for a compromise of some portion of the amount the apartment is sold for above your option strike price.
posted by AugustWest at 10:23 AM on August 11, 2015
Response by poster: BTW folks- my credit score is currently 623. Not ideal. But it's been on the rise since 8 months ago when it was under 550. That's pretty personal stuff but I want to be honest with all information I'm presenting to you guys for consideration.
I've been doing the work. Just got my CCs below the 25% debt load mark and have kept them there for the last month. And will continue to do so. I hear that helps a lot. So I'm expecting this score to rise, which is part of why I feel I need some time.
posted by tunewell at 10:26 AM on August 11, 2015
I've been doing the work. Just got my CCs below the 25% debt load mark and have kept them there for the last month. And will continue to do so. I hear that helps a lot. So I'm expecting this score to rise, which is part of why I feel I need some time.
posted by tunewell at 10:26 AM on August 11, 2015
You can secure a mortgage at that score. You might pay a slightly higher interest rate, but there's no magic that happens exclusively at 700 or 720+. Most important thing will be proof of a steady income, good payment history on your accounts, and a healthy anount of reserve funds in the bank (stocks, cash savings, 401k, they all count), typically 3-6 months.
If you can get gifts (not loans) from family to help boost that number, do it now so that the funds are 'clean' by the time you apply. Mortgage underwriters hit the brakes really hard when they see large deposits in your recent bank statements, but they typically don't go back more then 3-4 months so you have some time now.
25% credit card load? That's nothing to worry about at all, I speak from experience. Your minimum payments are all that matter to the underwriter, they factor into your monthly cashflow. Your payment history (everything on time?) is more important.
posted by JoeZydeco at 10:33 AM on August 11, 2015
If you can get gifts (not loans) from family to help boost that number, do it now so that the funds are 'clean' by the time you apply. Mortgage underwriters hit the brakes really hard when they see large deposits in your recent bank statements, but they typically don't go back more then 3-4 months so you have some time now.
25% credit card load? That's nothing to worry about at all, I speak from experience. Your minimum payments are all that matter to the underwriter, they factor into your monthly cashflow. Your payment history (everything on time?) is more important.
posted by JoeZydeco at 10:33 AM on August 11, 2015
To add my two cents as a small-time landlord (I own two rentals). It is highly unlikely that your "friend" had fallen into property ownership by a lucky accident. Unless there are some unusual circumstances, this woman is a financially savvy planner who has a decent understanding of money, contracts and so on, plus good impulse control that allowed her to save for the down payment.
From the tone of your question, you seem to doubt your moral standing because you are seeing her as a "victim" who got into a bad contract because she didn't understand the implications. But that's not the case here - she signed the contract because it seemed like a good deal to her at the time, and now she wants out just because things went your way and not hers.
It is especially telling that you two had it notarized - I promise you no landlord is going to agree to notarize a contract if they are not sure it is to their advantage.
As far as what you can actually afford and whatnot, you could ask your lawyer re. the possibility of partnering with someone on the actual ownership (if you can't afford to borrow on your own).
posted by rada at 10:37 AM on August 11, 2015 [9 favorites]
From the tone of your question, you seem to doubt your moral standing because you are seeing her as a "victim" who got into a bad contract because she didn't understand the implications. But that's not the case here - she signed the contract because it seemed like a good deal to her at the time, and now she wants out just because things went your way and not hers.
It is especially telling that you two had it notarized - I promise you no landlord is going to agree to notarize a contract if they are not sure it is to their advantage.
As far as what you can actually afford and whatnot, you could ask your lawyer re. the possibility of partnering with someone on the actual ownership (if you can't afford to borrow on your own).
posted by rada at 10:37 AM on August 11, 2015 [9 favorites]
Response by poster: Joey-
Thanks for the advice. The bottom line is I borrowed 5K from my retirement to pay the bills to get my credit score up. So I don't have any big cash at all. My mother is in a retirement home and I send her money. So no family help. I'm kind of on my own, which is why I was hoping to have more time to accrue some sort of down payment (though my $1,500 deposit and the $1,300 in extra rent are to go toward the purchase price according to the contract). I make a decent wage (mid-$50s) and have been at my job for seven years.
I did have a garnishment about a year back but my credit score has still risen.
I know it's far from perfect but I'm trying to pull this out.
posted by tunewell at 10:38 AM on August 11, 2015
Thanks for the advice. The bottom line is I borrowed 5K from my retirement to pay the bills to get my credit score up. So I don't have any big cash at all. My mother is in a retirement home and I send her money. So no family help. I'm kind of on my own, which is why I was hoping to have more time to accrue some sort of down payment (though my $1,500 deposit and the $1,300 in extra rent are to go toward the purchase price according to the contract). I make a decent wage (mid-$50s) and have been at my job for seven years.
I did have a garnishment about a year back but my credit score has still risen.
I know it's far from perfect but I'm trying to pull this out.
posted by tunewell at 10:38 AM on August 11, 2015
Best answer: The most galling thing about this is the landlady's niceynice act. Closely seconded by that cute move where she supposedly forgot all about the contract. Implying that mentioning it would be gauche because we're all friends here. Ugh. I hope this lawyer is excellent and you successfully buy the place and if you do, I hope you turn around and sell it in a month for GAJILLIONS OF DOLLLLARRRZZZ. Then send her a friendly thank you note with a picture of a fuzzy kitten on it.
posted by Don Pepino at 10:41 AM on August 11, 2015 [18 favorites]
posted by Don Pepino at 10:41 AM on August 11, 2015 [18 favorites]
Mod note: Heya, tunewell, it's fine to clarify once or twice in a thread but you need to not respond to every couple comments or treat this as a conversation space.
posted by cortex (staff) at 11:07 AM on August 11, 2015
posted by cortex (staff) at 11:07 AM on August 11, 2015
And that she's sorry but it's been a good run and she'll lookout for me that I don't have to leave right away.
Just that I be prequalified by April 2016. This lease goes to the end of March.
Even if you weren't wanting to buy the place, I'd be concerned that she never acknowledged your lease in that conversation. She's not doing you a favor by "making sure you don't have to leave right away." You have a lease, and (as I understand it, IANAL, I don't know Colorado specific law...) you should be able to stay there until your lease is over, even if she sells.
posted by Weeping_angel at 11:10 AM on August 11, 2015
Just that I be prequalified by April 2016. This lease goes to the end of March.
Even if you weren't wanting to buy the place, I'd be concerned that she never acknowledged your lease in that conversation. She's not doing you a favor by "making sure you don't have to leave right away." You have a lease, and (as I understand it, IANAL, I don't know Colorado specific law...) you should be able to stay there until your lease is over, even if she sells.
posted by Weeping_angel at 11:10 AM on August 11, 2015
the landlady's niceynice act.
Keep in mind, your landlady may have already gotten her own lawyer, who may be advising her on how to deal with you. If Landlady came to me with her side of the story, I might very well advise her to deal with you directly and "forget" the contract. If it works, great! If not, she's no worse off than before, because it's not apparent that an Evil Awful Lying Lawyer is conniving behind the scenes.
Hie thee to a lawyer, and you probably want to interview 2-3 before you choose. Many lawyers will do initial consults for free; if you get one who demands money, maybe move him down your list of people to talk to. It's fair for lawyers to want to get paid, and it's common for people to try to cobble together legal advice out of free consultations, but you want to find a lawyer you trust and can understand -- if you're looking at the possibility of a $60k payday, you really shouldn't cheap out on the few hundred it might cost to find a good lawyer, or the few thousand to get that payday.
Good luck!
posted by spacewrench at 11:12 AM on August 11, 2015 [2 favorites]
Keep in mind, your landlady may have already gotten her own lawyer, who may be advising her on how to deal with you. If Landlady came to me with her side of the story, I might very well advise her to deal with you directly and "forget" the contract. If it works, great! If not, she's no worse off than before, because it's not apparent that an Evil Awful Lying Lawyer is conniving behind the scenes.
Hie thee to a lawyer, and you probably want to interview 2-3 before you choose. Many lawyers will do initial consults for free; if you get one who demands money, maybe move him down your list of people to talk to. It's fair for lawyers to want to get paid, and it's common for people to try to cobble together legal advice out of free consultations, but you want to find a lawyer you trust and can understand -- if you're looking at the possibility of a $60k payday, you really shouldn't cheap out on the few hundred it might cost to find a good lawyer, or the few thousand to get that payday.
Good luck!
posted by spacewrench at 11:12 AM on August 11, 2015 [2 favorites]
Just thought of something: even if you can't get a mortgage yourself, you could possibly sell your option to someone who can. Basically, since you have the right to buy the place for $X, you may be able to sell that right to someone who wants the place. If the place is worth $X + 60k, then this other person would be ahead of the game if they pay you $50k and spend less than $10k on legal work to set up the deal. Even if the option isn't transferrable, you could set up a flip sale with two closings happening simultaneously: the sale to you for $X (which your landlady will hate) and the sale to the next guy for $X+60K (which you will love).
posted by spacewrench at 11:17 AM on August 11, 2015 [3 favorites]
posted by spacewrench at 11:17 AM on August 11, 2015 [3 favorites]
A skill that I had to build while doing political nonprofit communications work was the ability to be friendly with someone before, during and after a conflict, including high stakes ones. Something that helped me was to recognize that there's a process for most conflict resolution, and that often conflicts have very little to do with the personalities of people involved. Ideally, I wouldn't be galled (contrary to some of the other commenters) — she wants to break a contract, you want to enforce a contract. Your interests in this matter differ, but you've had the good sense to already consult a professional whose job it is to resolve conflicts over legal contracts. It's nothing personal — this is why lawyers and contracts exist. If she believes that your relationship is ruptured over it, so be it, but I guess I've seen enough of yesterday's litigants become tomorrow's board members to feel like this isn't something insurmountable unless the parties involved act like egregious dicks to each other over it. I mean, fuck, she's still going to sell the place for an amount she thought was reasonable four months ago. Either way, she's going to come out of this with more money than she had even a couple years ago. Have the lawyer handle the communication and enjoy your peace of mind.
posted by klangklangston at 11:39 AM on August 11, 2015 [7 favorites]
posted by klangklangston at 11:39 AM on August 11, 2015 [7 favorites]
From the tone of your question, you seem to doubt your moral standing because you are seeing her as a "victim" who got into a bad contract because she didn't understand the implications. But that's not the case here - she signed the contract because it seemed like a good deal to her at the time, and now she wants out just because things went your way and not hers.
Exactly this. She locked you into what she thought was a good price, and it was advantageous to her to do that. If the market had tanked and your apartment was now worth $60 less, there's no way that she would re-negotiate that contract in your favor. As it happens, you are the lucky one. She rolled the dice and lost, but that was her choice. You are not being that bad guy here. She is. Be smart, get a lawyer, look out for yourself. It sounds like you need this bit of financial good news more than she does, anyway. And it will make it a lot easier to get qualified for a mortgage if your purchase price is tens of thousands below market value.
posted by Pater Aletheias at 1:54 PM on August 11, 2015 [2 favorites]
Exactly this. She locked you into what she thought was a good price, and it was advantageous to her to do that. If the market had tanked and your apartment was now worth $60 less, there's no way that she would re-negotiate that contract in your favor. As it happens, you are the lucky one. She rolled the dice and lost, but that was her choice. You are not being that bad guy here. She is. Be smart, get a lawyer, look out for yourself. It sounds like you need this bit of financial good news more than she does, anyway. And it will make it a lot easier to get qualified for a mortgage if your purchase price is tens of thousands below market value.
posted by Pater Aletheias at 1:54 PM on August 11, 2015 [2 favorites]
Also, you can get pre-qualified for a mortgage in a matter of DAYS. Ask your friends if they like their lender and find someone local (probably not a credit union, they're good as banks but not quick as lenders). Heck, you can even find good mortgage brokers in your area through Yelp. The process of getting pre approved involves you providing a ton of documentation about your finances, so get ready for that. Good luck!
posted by purple_bird at 4:33 PM on August 11, 2015
posted by purple_bird at 4:33 PM on August 11, 2015
Geh... this kinda thing has happened to me twice.
I live in a different country to you, so this might not be relevant, but, I was half way into a 12 month lease, and the landlord (who was an investor living in another country, whom I never spoke to) put the place up for sale. Someone put in an offer. The (local) property manager called me and told me an offer had been made and would I like to make a counter-bid? I declined. They asked "Well when will you be able to move out?", and I said "Either in 6 months when my lease is up, or when the new owner pays me the remaining six months on my lease."
I was there for another 6 months, then out on my arse.
The second time I was on a month-by-month lease, so had no choice but to get out within a month of it being sold.
posted by Diag at 4:02 AM on August 12, 2015
I live in a different country to you, so this might not be relevant, but, I was half way into a 12 month lease, and the landlord (who was an investor living in another country, whom I never spoke to) put the place up for sale. Someone put in an offer. The (local) property manager called me and told me an offer had been made and would I like to make a counter-bid? I declined. They asked "Well when will you be able to move out?", and I said "Either in 6 months when my lease is up, or when the new owner pays me the remaining six months on my lease."
I was there for another 6 months, then out on my arse.
The second time I was on a month-by-month lease, so had no choice but to get out within a month of it being sold.
posted by Diag at 4:02 AM on August 12, 2015
I just want to echo everyone else's advice that you should talk to your lawyer and go from there. Furthermore: you should stop taking advice from us. Do not listen to what anyone on the internet tells you about whether or not the contract is enforceable. Your lawyer will actually read the contract and give you advice based on the law in your jurisdiction. And do not listen to what anyone tells you about what to say to your landlord-- your lawyer will tell you if anything you say to her might have unexpected consequences. Good luck!
posted by Henrietta Stackpole at 9:04 AM on August 12, 2015 [1 favorite]
posted by Henrietta Stackpole at 9:04 AM on August 12, 2015 [1 favorite]
Especially since real estate law is one of the areas of the law most bound by local jurisdictions — outside of "talk to a lawyer," there's just no way any of us will be experts except real estate lawyers who happen to practice in Denver, and they're pretty much guaranteed to avoid answering this question.
posted by klangklangston at 9:52 AM on August 12, 2015
posted by klangklangston at 9:52 AM on August 12, 2015
Response by poster: Just as a follow-up:
I spoke to a lawyer and she seemed supremely confident in the agreement on paper. She said "This lady wrote this agreement of her own accord and signed it. It states plainly the terms. She has to stick to it."
They offered to write a letter stating this but, as I stated earlier, I was hoping to start softer with my own communications. It was agreed that I could write an e-mail to my LL as long as it was stated VERY plainly in present active tense: "Dear LL, I am pursuing our Option to Purchase Agreement that was signed and notarized last March."
Then just see what her reaction is.
The thing that scares me is that the lawyer tells me that there is no mechanism in Colorado for covering legal fees. So I'm scared that if she fights, I won't be able to afford much defense. I don't know.
They are filing the agreement at the county clerks office for me and awaiting any more need I might have.
posted by tunewell at 10:40 AM on August 12, 2015 [12 favorites]
I spoke to a lawyer and she seemed supremely confident in the agreement on paper. She said "This lady wrote this agreement of her own accord and signed it. It states plainly the terms. She has to stick to it."
They offered to write a letter stating this but, as I stated earlier, I was hoping to start softer with my own communications. It was agreed that I could write an e-mail to my LL as long as it was stated VERY plainly in present active tense: "Dear LL, I am pursuing our Option to Purchase Agreement that was signed and notarized last March."
Then just see what her reaction is.
The thing that scares me is that the lawyer tells me that there is no mechanism in Colorado for covering legal fees. So I'm scared that if she fights, I won't be able to afford much defense. I don't know.
They are filing the agreement at the county clerks office for me and awaiting any more need I might have.
posted by tunewell at 10:40 AM on August 12, 2015 [12 favorites]
Which is what I think her lawyer told her: "Try just talking to her nicely and see if she'll resist."
posted by rhizome at 1:31 PM on August 12, 2015
posted by rhizome at 1:31 PM on August 12, 2015
If you ever wanted to provide a final update, I would love to know what happened.
posted by skewed at 8:58 PM on August 19, 2015 [3 favorites]
posted by skewed at 8:58 PM on August 19, 2015 [3 favorites]
This thread is closed to new comments.
Discuss those considerations with the lawyer. You've already made the right move. You are not a "bad guy" for seeking to enforce your legal rights.
posted by Tanizaki at 8:32 AM on August 11, 2015 [19 favorites]