Rent to own-took over house/has mortgage

[43Campbell]

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

Father passed away, children took over home (has mortgage) which now has been listed as the estate of. Tenant paid $5,000 down in 2008, signed promissory note to pay in full by November 2008. Done numerous renovations to home. Tenant has been paying rent towards this home which was honored through 12/2010. Gave tenant a new rental agreement going up on rent April 1st, which he has failed to sign and send back.

It has come to our attention the home now needs to be sold to pay funeral expenses . What is our obligation and what is the tenants obligation (he can not get financing).

 

[justalayman]

Tenant has been paying rent towards this home which was honored through 12/2010

do mean as rent or as towards the purchase? From what you wrote, it would appear the rent to own was not able to be completed as agreed. If so, I would suspect the contract would rule. Did it say what happens if the tenant/buyer should fail to complete the agreement?

 

[Zigner]

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

Father passed away, children took over home (has mortgage) which now has been listed as the estate of. Tenant paid $5,000 down in 2008, signed promissory note to pay in full by November 2008. Done numerous renovations to home. Tenant has been paying rent towards this home which was honored through 12/2010. Gave tenant a new rental agreement going up on rent April 1st, which he has failed to sign and send back.

It has come to our attention the home now needs to be sold to pay funeral expenses . What is our obligation and what is the tenants obligation (he can not get financing).

Send tenant proper notice that you are terminating his tenancy.

 

[43Campbell]

Rent-to own-to over house/has mortage

No it does not say anything in the contract. Everything was recorded. Tenant got 0 percent interest for six months, promissory note signed to obtain a mortgage loan in November of the same year. The whole time there has been a loan payment 9.9 percent interest, with all payments being applied towards this loan.

Met with tenant in December 2010 after dad passed away, he assumed that amount being paid $500.00 0 percent interest was being applied to his payment for a total of over $$17,500 paid out. He now states that he could buy home for $32,000.00. The mortgage loan as of today's date $49,553.51 is what's owed. In order to make money to cover burial expenses we have to sell over what is owed on the home.

Any advice? We do have an appointment with the attorney that did the original rent to own contract in 2008 to see what we need to do on transferring to the biological children's names.

 

[Zigner]

No it does not say anything in the contract. Everything was recorded. Tenant got 0 percent interest for six months, promissory note signed to obtain a mortgage loan in November of the same year. The whole time there has been a loan payment 9.9 percent interest, with all payments being applied towards this loan.

Met with tenant in December 2010 after dad passed away, he assumed that amount being paid $500.00 0 percent interest was being applied to his payment for a total of over $$17,500 paid out. He now states that he could buy home for $32,000.00. The mortgage loan as of today's date $49,553.51 is what's owed. In order to make money to cover burial expenses we have to sell over what is owed on the home.

Any advice? We do have an appointment with the attorney that did the original rent to own contract in 2008 to see what we need to do on transferring to the biological children's names.

Disregard my prior advice. Speak to the attorney about the situation...

 

[justalayman]

from what it sounds like, the land contract might still be in force. That is something you will discover when the lawyer reviews he situation though. If it is, you cannot simply dump the guy. You must terminate the contract as either it directs or as the law directs.

and if the contract is still in force, it survives even though your father hasn't.

 

[Gail in Georgia]

What was the agreed upon price of the house when your father made the deal with this tenant?

Your posts are confusing; initially you state that the tenant was paying rent, then you indicate that all the payments were being applied toward the loan.

Which is it? Typically in a rent/lease to own situation, the tenant pays rent AND an amount above the rent that goes toward the purchase of the house.

Gail

 

[43Campbell]

Rent to own/mortage

It was rent to own, signed contract April of 2008, promissory note signed in April of 2008, to pay in full November of 2008. What is promissory note if you fail to follow through with payment. Was told by his girlfriend that they asked tenant numerous times about getting a mortgage. He always came up with an excuse. He presently is co-owner of a business, has lights in his name and also pays vehicle insurance, cell phone etc. So we know that he is establishes credit.

 

[Gail in Georgia]

What is a business manager (dad) who lets a promissory note slide for over two years?

Dad appeared pleased with the situation as he allowed it to continue for an extended period of time.

Could you now attempt to evict this tenant for failing to meet the requirements of the initial rent to own situation? Yes. Would he have an equally effective argument that because dad did not enforce the promissory note requirement for over two years (and he continues to pay rent) that you have no right to do this? Yes.

You indicate his last rent payment was in December, 2010. Has he paid since then? If not, this might be your out in regards to eviction.

It appears your family assumes that once the house is on the market, it's going to sell quickly. That may not be possible in this current housing market.

Gail

 

[justalayman]

43Campbell;2745701]It was rent to own, signed contract April of 2008, promissory note signed in April of 2008, to pay in full November of 2008. What is promissory note if you fail to follow through with payment.

if no action was taken to collect it, it is an outstanding debt by the person promising to pay.

it is simply an IOU.


You have two problems: you have a rent to own contract and you have a promissory note.

Depending on how things were written, the guy may actually be able to claim title to the house because he paid for the house with.... a promissory note.

That would mean he owns the house but owes on the promissory note and unless the home is engaged as security against the note, you may have no right to take the house. Your only action might be to sue for the promissory note.

Now, if the home is engaged as security against the note, you may be able to foreclose on the note.

In other words; you need a lawyer to look at everything to determine what options you have.

 

[justalayman]

=Gail in Georgia;2745719]
Could you now attempt to evict this tenant for failing to meet the requirements of the initial rent to own situation? Yes.

we really don't know that. There has been no information given concerning the contract and what it might or might not allow.

 

[Gail in Georgia]

Quite true....

Gail

 

[43Campbell]

Rent to own/mortgage

Thanks for all of your information. The only sure way to find out what we need to do is contact the attorney that originally did the contract. We have told the tenant that he does need to see legal advice, take contracts that he has to see what his options are.

The tenant was unaware that there was a mortgage on the home. Assumed that his payment of $500.00 was going to purchase price, sure it was going to it. He is current on his payment. But interest rate on mortgage is 9.9 percent interest, with only $71.25 going towards payment.

Our dad, self-employed person that he was, was paying home owners insurance and personal property taxes out of his own pocket. It appears that he did not want to approach the tenant and try to push the issue. Now it has fallen into our hands to do something with the mess.

We did not find out until after he had passed away that he was still the owner of the home. He also owns a concession stand that a person is making payments on, that it will take a while for her to pay.

 

[43Campbell]

Rent to own/mortgage

Spoke with local attorney whom drew up rent to own six month contract and promissory note.

Attorney stated that tenant is in default of agreement, which we knew,therefore tenant does not have a leg to stand on. Since we are trying to go up on his payment beginning with April 1st, tenant has to return the rental agreement or get out per attorney. Then we can actually try to sell house for Tax assessed vaule of $74,500. If it does not happen we are to return to the attorney for legal action.

We having been trying to get the tenant to buy the house at $56,100.00 It is a great deal, but he is dragging his feet not taken us seriously. He has stated that he will contact his attorney for legal advice.