Fixing problems with a Lease to purchase home

4 Replies

Hello, I am new to the rental world and have a question.  I own a home, and have set up a lease to purchase contract with a tenant.  At the inspection of the property before the contract was signed we pointed out the issues the home had.  It needed siding and 2 of the bathroom showers needed updated tile.  The tenant was aware of these issues and signed the contract anyway.  He is a general contractor and is now (6 months later) wanting us to let him replace the siding and re-tile both bathrooms, and take that cost off the final sale price of the home.  I feel like that is something that he should have requested before the contract was signed.  The siding is leaking in one spot, and we offered to have it fixed, but he does not want us to hire someone, he wants to do it himself, and not just fix it, but replace it all.  Any suggestions on how to handle this issue?

Hmm..have you gotten any quotes on getting the repairs done? If you have, tell him how much you would have paid to get it done, and that you are not willing to reduce any more than that amount (if it seems reasonable to you of course) to the final cost of the house. 

If he agrees, write up a document stating that you are not responsible for the repairs and he agrees that you aren't. If you both agree, I see it as a win win, no out of pocket expense for you in the time being, and you don't have to deal with making sure it gets done..it would be his responsibility. 

Thank you for the reply.  I want to be fair with him but I also don't want to lose money.  The purchase price we agreed upon after the 2 years was $320 that was an as is price.  We told him the siding would need to be replaced within the next 5 years so he agreed to that price knowing he would have to replace the siding eventually.  I just don't know if I should take more money off the purchase price when it was already reduced.  It would cost us around 2k to fix where it's leaking, and we are willing to do that but he is wanting us to reduce the price 12k to replace it all.

It all goes back to what does your contract say regarding maintenance and repairs? Regarding the leaking siding: If it says he is responsible for maintenance and repairs and the issues are not fixed it could be grounds for eviction (last resort). You do not want to let this tenant live in the house and not keep it in "proper" condition. That being said this sounds like an issue that should have been fix negotiated when it was noted in the first place. 

As for the tile updating and remodeling it is not your responsibility financially unless you agreed to it in the lease to purchase contract. So it would be on his dime. That being said, if there are no issues with the tile (chipping, cracking, falling off, water leaks, etc...) I would tell him to hold off on any bathroom remodeling for the remaining 18 months.

You might see the following link as it pertains to tenants doing work.

http://www.biggerpockets.com/forums/52/topics/1969...

Have you considered offering to reduce the purchase price by the amount of the repair cost?  That way, the tenant can go ahead and replace the siding himself, but it'll only cost you what the repair would cost.  

I think you can find a compromise if you're creative.  After all, replacing the siding would increase the value of the house.  I'd also consider offering to pay for the materials and let the tenant supply the labor, but keep the purchase price of the house the same.

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