I
Irene04
Guest
What is the name of your state? California
We have a lease-option contract with the optionees last Nov 01 and the option is due this Dec 02. We got e-mail messages from the fire department that our house was burned to the ground in Jun 02. The optionees forgot to turn off one of the stove burners before they went to visit their friends. Please help us by explaining the lease-option clauses below.
1. DAMAGE OR DESTRUCTION: If, prior to exercise of this Option, by no fault of Optionee, the Property is totally or partially damaged or destroyed by fire, earthquake, accident or other casualty, Optionee may cancel this Agreement by giving notice to Optionor, and is entitled to the return of all Option Consideration paid. However, if, prior to Optionee giving notice of cancellation to Optionor, the Property has been repaired or replaced so that it is in substantially the same condition as of the date of acceptance of this Agreement, Optionee shall not have the right cancel this Agreement.
QUESTION: The optionees claim that this fire is an "accident" (they left the stove burner on) and therefore they want their option money back. They admitted to the fire investigator that they left the stove on and it is written in the fire report. Does their accident constitute "fault" under the contract?
Just for comparison, would it still be their "fault" if their dog had knocked over a high intensity (halogen)lamp that would have started the fire? (This actually happened to our neighbor.)
2. NON-EXERCISE: If the Option is not exercised in the manner specified, within the option period or any written extension thereof, of if it is terminated under any provision of this Agreement, then:
A. The Option and all rights of Optionee to purchase the Property shall immediately terminate without notice; and
B. All Option Consideration paid, rent paid, services rendered to Optionor, and improvements, made to the Property, if any, by Optionee, shall be retained by Optionor in consideration of the granting of the Option; and
C. Optionee shall execute, acknowledge, and deliver to Option or, within 5 calendar days of Optionor's request, a release, quitclaim deed, or any other document reasonably required by Optionor or a title insurance company to verify the termination of the Option.
QUESTION: Do we have to give them back their option money or a portion thereof, since they claim it was just an "accident?" Also, now that there is no sale, who is responsible for paying the 3% realtor fee already paid, since our house no longer exists to resell?
3. DISPUTE RESOLUTION: Optionee and Optionor agree that any dispute or claim arising between them out of this Agreement shall be decided by the same method agreed to for resolving disputes in the Purchase Agreement, which states:
A. MEDIATION: Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. Paragraphs below apply whether or not the Arbitration provision is initialed. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action wtihout first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.
QUESTION: What are the typical costs and time factors for mediation in California? What are the qualifications to look for in a (licensed?) real estate mediator - especially since both parties are now overseas (France and Japan)? What happens if the optionees refuse to mediate, or if the mediation is not successful? Why does the contract refer to attorney's fees if we are going to mediate or arbitrate; are lawyers usually involved? If we are the prevailing party, can we recover our portion of the fees paid for mediation?
4. LEASE OPTION AGREEMENT - SECURITY DEPOSIT: Tenant agrees to pay $___ as a security deposit. All or any portion of the security deposit may be used, as reasonably necessary to repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant. Additionally, we wrote into the Option Agreement under OTHER TERMS AND CONDITIONS: $___ security deposit to remain in escrow until option is exercised to cover cost of unexpected expenses such as cleaning, repairs, etc. in event option is not finalized.
QUESTION: Do we have a right to keep the security deposit money since the whole house burned down by their "accident?"
Thank you for your time on this issue.
Irene04
We have a lease-option contract with the optionees last Nov 01 and the option is due this Dec 02. We got e-mail messages from the fire department that our house was burned to the ground in Jun 02. The optionees forgot to turn off one of the stove burners before they went to visit their friends. Please help us by explaining the lease-option clauses below.
1. DAMAGE OR DESTRUCTION: If, prior to exercise of this Option, by no fault of Optionee, the Property is totally or partially damaged or destroyed by fire, earthquake, accident or other casualty, Optionee may cancel this Agreement by giving notice to Optionor, and is entitled to the return of all Option Consideration paid. However, if, prior to Optionee giving notice of cancellation to Optionor, the Property has been repaired or replaced so that it is in substantially the same condition as of the date of acceptance of this Agreement, Optionee shall not have the right cancel this Agreement.
QUESTION: The optionees claim that this fire is an "accident" (they left the stove burner on) and therefore they want their option money back. They admitted to the fire investigator that they left the stove on and it is written in the fire report. Does their accident constitute "fault" under the contract?
Just for comparison, would it still be their "fault" if their dog had knocked over a high intensity (halogen)lamp that would have started the fire? (This actually happened to our neighbor.)
2. NON-EXERCISE: If the Option is not exercised in the manner specified, within the option period or any written extension thereof, of if it is terminated under any provision of this Agreement, then:
A. The Option and all rights of Optionee to purchase the Property shall immediately terminate without notice; and
B. All Option Consideration paid, rent paid, services rendered to Optionor, and improvements, made to the Property, if any, by Optionee, shall be retained by Optionor in consideration of the granting of the Option; and
C. Optionee shall execute, acknowledge, and deliver to Option or, within 5 calendar days of Optionor's request, a release, quitclaim deed, or any other document reasonably required by Optionor or a title insurance company to verify the termination of the Option.
QUESTION: Do we have to give them back their option money or a portion thereof, since they claim it was just an "accident?" Also, now that there is no sale, who is responsible for paying the 3% realtor fee already paid, since our house no longer exists to resell?
3. DISPUTE RESOLUTION: Optionee and Optionor agree that any dispute or claim arising between them out of this Agreement shall be decided by the same method agreed to for resolving disputes in the Purchase Agreement, which states:
A. MEDIATION: Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. Paragraphs below apply whether or not the Arbitration provision is initialed. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action wtihout first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.
QUESTION: What are the typical costs and time factors for mediation in California? What are the qualifications to look for in a (licensed?) real estate mediator - especially since both parties are now overseas (France and Japan)? What happens if the optionees refuse to mediate, or if the mediation is not successful? Why does the contract refer to attorney's fees if we are going to mediate or arbitrate; are lawyers usually involved? If we are the prevailing party, can we recover our portion of the fees paid for mediation?
4. LEASE OPTION AGREEMENT - SECURITY DEPOSIT: Tenant agrees to pay $___ as a security deposit. All or any portion of the security deposit may be used, as reasonably necessary to repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant. Additionally, we wrote into the Option Agreement under OTHER TERMS AND CONDITIONS: $___ security deposit to remain in escrow until option is exercised to cover cost of unexpected expenses such as cleaning, repairs, etc. in event option is not finalized.
QUESTION: Do we have a right to keep the security deposit money since the whole house burned down by their "accident?"
Thank you for your time on this issue.
Irene04