It’s legal if the operating agreement says they can do this.

It seems this @Magus Ahnend is in a very sound legal position and the original seller I am guessing screwed herself by playing games. 

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice.

It’s simply the legal step a landlord must take when a tenant is in breach — usually for nonpayment of rent, but sometimes for other violations.

Did you receive any legal guidance?

You clearly know this, but for those reading along the word "option"  is what changed this from an illegal act "acting as a broker without a license"  to a perfectly legal transaction. 

My partner, who served on the Planning and Zoning Committee, identified that a legal lot split was possible.

For example, if they were going to threaten legal action against you, you could argue that it was a necessary cost to incur. 

You should carefully review the terms of the loan, before you agree on proceeding with the loan process. ...Here is the TERMS AND CONDITION review and get back to me immediately.{1} The applicant will start the repayment of loan at the end of every month starting from 6 months after loan has been transferred, the loan is charged at 3% interest rate.{2} Failure to pay back the loan at this expected date/period, legal actions will be taken against the applicant by our attorney immediately. {3} Applicant who is unable to meet with the repayment will be given 2 weeks more as a grace period before legal actions will be taken. {4} Note: As soon as you in agreement with the terms and condition below your loan will be approved by the governmental body so as the loan papers can be processed. {5} Note: The borrower will be responsible for the loan processing/documentation fee and this is the only fee expected to pay for this transaction to have your loan transferred to you as soon as possible, NOTE: This payment will not be deducted or added to the loan IT IS PAID UPFRONT $1075.00. * Your inability to pay or agree to the payment of the upfront fee, means you are incompetent of repaying the loan.

You still get to do your screening and refuse anyone, in a legal manner, that fails your legal criteria.My favorite:  A family of two adults, 4 children, and 2 dogs.