Rent to Own

[Arghhhhh]

What is the name of your state (only U.S. law)? MO

A family member, who is in a nursing home, owns a house. There is no mortgage on the house, it is paid in full. He is a Veteran and has 401K from 20 years of employment. My Uncle has power of attorney and handles all his affairs.

Almost 3 years ago, Uncle was having trouble with tenants. The tenant at that time was suppose to be making repairs to the house to help it sell, but instead left it in worse disrepair. Uncle was frustrated and tired of having to clean the house up, mow the yard and mess with it in general.

My Dad and I offered to take over the utilities and maintenance of the house, to help out. It was agreed that I would have first option to move in and rent to own the house and all my rent would apply towards the purchase. I moved into the house 4 months later and have been living here since.

There was no contract (yes I know, my bad), but according to Uncle, this was all approved by the court. He asked me to pay the taxes and insurance. I said I would if it could be done as an owner-finance so I would be able to take the tax credits. He said no to the owner finance, so I said no, to paying the tax and insurance.

Now, six months ago, I found a simple lease purchase contract online, and asked Uncle to negotiate and sign it, so I could get financing. He sent it to the attorney, who approved it, with a couple of tweaks. I countered with a resolution for the tweaks.

This all took several months, I thought it was for the attorney review, but it turns out Uncle has shut down and refuses to negotiate. He now says I have to submit a bid to the court in order to buy the house, he is not honoring my rent paid towards the purchase and he is raising my rent, $200, to cover the taxes and insurance. He stated that since he told the court I would pay these, he was forced to make me pay them.

What are my legal options? Does the “court approval” 3 years ago give me grounds to force him to honor the verbal agreement? Does the attorney letter that my proposed contract was “doable” help me in any way?

I have paid all my “rent” on time. I have taken care of all repairs and maintenance. I don’t want a court battle, but I do not want to just walk away either.

 

[HomeGuru]

What is the name of your state (only U.S. law)? MO

I am not sure of some of the correct terminology, so bear with me. And I am sorry for the length, but it is not a short story. A family member, who is in a nursing home, owns a house. There is no mortgage on the house, it is paid in full. He is a Veteran and has 401K from 20 years of employment. My Uncle has power of attorney and handles all his affairs.

Almost 3 years ago, Uncle was having trouble with tenants. The tenant at that time was suppose to be making repairs to the house to help it sell, but instead left it in worse disrepair. Uncle was frustrated and tired of having to clean the house up, mow the yard and mess with it in general.

I was coming out of a divorce and needed a place fairly soon, so my Dad and I offered to take over the utilities and maintenance of the house, to help out. It was agreed that I would have first option to move in and rent to own the house. At that time it was stated that I could buy the house for 75% of the appraised value and all my rent would apply towards the purchase. I moved into the house 4 months later and have been living here since. As with most divorces, I had issues to clear up on my credit before I could qualify. There was no time frame specified for me to do this.

There was no contract (yes I know, my bad), but according to Uncle, this was all approved by the court. He asked me to pay the taxes and insurance. I said I would if it could be done as an owner-finance so I would be able to take the tax credits. He said no to the owner finance, so I said no, to paying the tax and insurance.

Six months ago, I learned that with a lease purchase contract, I could apply for a refinance rather than a purchase, and since there was court approval, I should be able to back date the contract. I found a simple contract online, put all the information together as close as I could and asked Uncle to negotiate and sign it. He sent it to the attorney, who approved it, with a couple of tweaks.

1. I was to pay for an appraisal; and 2. We needed to resolve the issue of the taxes and insurance that he stated I had agreed to pay.

I asked if I could use a portion of one month’s rent to pay for the appraisal and build it back into the purchase price. (I had just been forced into a custody battle, with abuse, against my ex so all my funds were tied up in attorney and GAL fees). In order to make this all work, I said that I would agree to a portion of the taxes & insurance, but again I needed to build that back into the purchase price.

This all took several months, I thought it was for him to have the attorney review, but it turns out Uncle shut down and refuses to negotiate. He now says I have to submit a bid to the court in order to buy the house. And he just informed me that he has raised my rent, to cover the taxes and insurance. He stated that since he told the court I would pay these, he was forced to make me pay an additional $200 per month to cover them.

I don’t mind paying the taxes and insurance, if I can get the lease purchase agreement. If I am just a tenant, I don’t feel that I should. Can he make me pay them? I know he can raise the rent, but since he specifically stated that the increase was for taxes and insurance, can I refuse to pay it, or would that give him grounds to evict me?

What are my legal options? Does the “court approval” 3 years ago give me grounds to force him to sign a lease purchase contract? Does the attorney letter that my proposed contract was “doable” help me in any way?

I have paid all my “rent” on time. I have taken care of all repairs and maintenance. I don’t want another court battle, especially against family, but I do not want to just walk away either. If I have to move, I need time to find a place and I still have a shortage of money with my custody issue… so I may need a lot of time. I have a list of repairs the house needs and they do fall under the LL responsibility… so I am prepared to be a “tenant” and make him be a true “LL”. But, without even a rental agreement, what are my legal options and rights?

It is my understanding that Uncle cannot purchase the house at the 75% of the appraised value, but I have heard rumors that one of his kids recently lost their house to foreclosure, so I am thinking that he is trying to push me out so his kid can buy this house. I’m not sure on that, it’s just a guess and the only reason that makes any sense for him to be doing this. In my proposal, I was even willing to negotiate with an appraised value from 3 years ago. With the 75% and my rent going towards the purchase, I was still under the loan to value ratio and I did not want to short change the family member that owns the house.

Any and all thoughts are appreciated. I need to get all my facts together then decide the best way to proceed.

Thanks to all.

**A: your post is way too long. Can you summarize in a short paragrah?

 

[Arghhhhh]

**A: your post is way too long. Can you summarize in a short paragrah?

Ok... is this better?

Thank you.

 

[ecmst12]

Real estate contracts MUST be in writing, with the exception of simple month to month tenancy where the state will create a verbal lease. For purchase though, it has to be written. You did not have a signed written agreement when you moved in, so all you have is a simple month to month tenancy, with your rent paid being simply rent. If you don't want to continue to rent, then move out. He doesn't have to agree to your terms, and you don't have to agree to his.

 

[Arghhhhh]

Real estate contracts MUST be in writing, with the exception of simple month to month tenancy where the state will create a verbal lease. For purchase though, it has to be written. You did not have a signed written agreement when you moved in, so all you have is a simple month to month tenancy, with your rent paid being simply rent. If you don't want to continue to rent, then move out. He doesn't have to agree to your terms, and you don't have to agree to his.

Actually these were his terms. I am even happy with a contract now, as per the attorney. Uncle gave these terms to the court for approval. Would those court records help in any way?

I have no choice but to continue renting for now, and I will call him for repairs that are LL responsibility.

btw - I like your signature. It took me a while to post this because I am not out for money. I would like to have mine and could probably go through the family to get it, but I want to try to do this on my own first. I thought his word was good enough. My bad. Life lesson learned.

 

[justalayman]

I have no idea what "court approval" he would have acquired 3 years ago. Why would he need or seek some court approval for something fully within his power to contract to on behalf of the owner?

no, whatever was supposedly agreed to 3 years ago is irrelevant. What was agreed to 3 minutes ago is irrelevant unless it is reduced to writing and acknowledged.

Bottom line: no contract means no contract.

 

[Arghhhhh]

I have no idea what "court approval" he would have acquired 3 years ago. Why would he need or seek some court approval for something fully within his power to contract to on behalf of the owner?

no, whatever was supposedly agreed to 3 years ago is irrelevant. What was agreed to 3 minutes ago is irrelevant unless it is reduced to writing and acknowledged.

Bottom line: no contract means no contract.

It was my understanding that this was not fully within his power. The owner is in a nursing home, and Uncle has to get approval from the court for handling all the assets.

I know typically I would be SOL. I'm just wondering if I can prove there was an agreement and compel Uncle to honor it. I could create an all out family war, but I don't want to do that. I will walk away if I have to. I just want to exhaust every option.

 

[justalayman]

unless there is some limitation to his POA for some reason, he would not need a courts approval. Are you sure he has a POA and not a court acknowledged financial custodianship? That could lead to a courts approval, or at least oversight, of the finances.

but it doesn't mean anything. A real estate contract must be in writing. It is required by law that it be in writing. Due to that, no written contract means there is or never has been a contract. What happened 3 years ago could be explained simply as a negotiation which fell through.
In fact, that appears to be exactly what you describe:

There was no contract (yes I know, my bad), but according to Uncle, this was all approved by the court. He asked me to pay the taxes and insurance. I said I would if it could be done as an owner-finance so I would be able to take the tax credits. He said no to the owner finance, so I said no, to paying the tax and insurance.

he refused your offer of owner financing and that appears to be the end of the negotiations.

The fact is was approved by the court only means he had the authority to commit to the deal had the negotiations been successful. The courts approval is not a commitment on anybody's part, merely one step in the process.

 

[Arghhhhh]

unless there is some limitation to his POA for some reason, he would not need a courts approval. Are you sure he has a POA and not a court acknowledged financial custodianship? That could lead to a courts approval, or at least oversight, of the finances.

I guess this is where I am really at. I am not sure on the POA or custodianship, but I will find out.

I get that the contract has to be in writing. I talked with several lenders. They said the contract could be back dated to the original agreement date for me to get financing.

Contract wise, I know I don't have much choice, until it is in writing. I still want to try and convince Uncle to honor his agreement. This is a civil matter and "legally", with the right argument, and any court records... can I prove there was an agreement and compel him to honor it?