All Forum Posts by: Scott Moyes

Just an FYI: Here's the things the Judge/Court Advised me not to do. BTW, it is the Law in AZ and enforced in other states as Case Precedent.

1. You CANNOT pre-determine a future purchase price or discounted buy out.
2. You CANNOT collect more than 1.5x more than the monthly rent upfront.
3. You CANNOT credit any part of the deposit or rent toward a future purchase.
4. You CANNOT require the Tenant to do ANY maintenance
5. Two Documents (Lease & Option) doesn't matter as long as the Leasee has the Option, it is considered a "Sale", period.

These five things classify the transaction as a "Delayed or Disquised Sale" and gives an Equitable Claim of Interest IN THE PROPERTY to the Tenant which makes them "an Owner" and you can't evict an owner, you must foreclose.

What I learned is, the reason most Tenant / Buyers are successfully evicted is, they don't know their rights "as an owner" and just leave believing they have to. If they appear in court and Claim Equity, the eviction Judge CANNOT hear their case. You must go through with a full foreclosure action instead. Sucks Huh?

This situation is one of the reasons I recommend to NEVER do Lease Options and why you should ALWAYS use a Title Holding Land Trust when doing ANY form of Seller Carry or Assisted Financing. A valid THLT is not an alternative to inherently dangerous seller carry arrangements such as CFD, AITD, LO, LP, LC, RTO, etc., IT IS THE SAFE & LEGAL WAY TO DO THEM.

All of these methods, terms, contracts, etc., can be done within a THLT and eliminate 99% of all the Risk & Liability of such transactions. Believe me, I learned the hard way. If you'd a written copy of My Personal Lease Option Horror Story just say so and I'll be glad to send it to you along with what I learned and how to protect myself from these inherently dangerous seller carry methods and documents.