# Lease with option to purchase - anyone ever seen this before?



## grandmajo (Mar 25, 2008)

I'm helping a friend who signed a lease agreement with option to purchase contract.

I'm a little baffled by what the contract is called because it states that the term of the lease is from October 1, 2012 to March 31, 2020....yes, you read that right. The lease is for 7.5 years! At the end of the lease it says that he can purchase the home for $205.

Has anyone ever seen anything like this? This is a mobile home in a park. I have never heard of a lease lasting for 7.5 years? The park manager told him that if he didn't make the rent payments that they would take him to court and foreclose on him. I've never heard of a foreclosure on somebody who is leasing?

And yes, I am taking him to my lawyer to have the contract reviewed. There's other things that don't look quite right in it.


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## mekasmom (Jan 19, 2010)

I don't know if it is legit, but it sounds like a good deal.


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## ozarkchaz (Feb 4, 2005)

A lease (contract) can be tailored to whatever terms both parties agree upon.

Usually with a lease, the seller still holds title to the property, until the contract is completed. In that situation, the seller/owner will face foreclosure not the buyer/lease holder.


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## Joshie (Dec 8, 2008)

If your friend already signed the lease what do you expect a lawyer to do?


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## grandmajo (Mar 25, 2008)

Thank you for your replies!

Joshie, there are some items on the contract that I think are questionable/missing. That's according to what I've read about the requirements for this type of contract in our state.


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## EscapingToronto (Jun 27, 2011)

People here do "rent to own" as a way of skirting mortgage laws. 
You just have to be careful not to get hosed with crazy interest rates.


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## edcopp (Oct 9, 2004)

grandmajo said:


> I'm helping a friend who signed a lease agreement with option to purchase contract.
> 
> I'm a little baffled by what the contract is called because it states that the term of the lease is from October 1, 2012 to March 31, 2020....yes, you read that right. The lease is for 7.5 years! At the end of the lease it says that he can purchase the home for $205.
> 
> ...


Well if your friend has already signed the agreement, it is a bit late to see a lawyer.

That said what you describe is common and becoming more common. This procedure is taught in seminars, for a fee. Don't you have late night tv where you are? 

It is impossible to determine what your friend has signed without reading the document. Good luck with the lawyer, take plenty of money with you.


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## edcopp (Oct 9, 2004)

The book "Deals on Wheels" by the late Lonnie Scruggs, can still be found on Amazon for about $30. It is the text for a seminar or two, and will probably tell you a lot more than the "lawyer" can or will for $30. 

I would bet it's legal. One of Lonnies' lawyers was a Columbus Ohio attorney.


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## cadence (Feb 16, 2013)

Without looking at the document its hard to interpret. But from your description it appears it may be a lease/purchase agreement where the renter can own the trailer by making a single payment of $205 at the end of the lease.


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## grandmajo (Mar 25, 2008)

Thanks everyone! 

edcopp, I will look for that book, I appreciate the info on that. Yes, we do have late night tv here but I'm sleeping late night


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## EscapingToronto (Jun 27, 2011)

So I'm curious about what the lawyer said? ...and how much are the monthly payments?


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## SteveD(TX) (May 14, 2002)

edcopp said:


> The book "Deals on Wheels" by the late Lonnie Scruggs, can still be found on Amazon for about $30. It is the text for a seminar or two, and will probably tell you a lot more than the "lawyer" can or will for $30.
> 
> I would bet it's legal. One of Lonnies' lawyers was a Columbus Ohio attorney.


Poor old Lonnie - I didn't know he had passed. I have that book and even did a couple of "Lonnie deals" until Texas essentially made them illegal. Most "lease to own" and land contract real estate deals are also illegal in Texas now for any type of real estate.


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## EscapingToronto (Jun 27, 2011)

Is that so only banks are allowed to take advantage of people?


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## ChristieAcres (Apr 11, 2009)

Lease Purchase Option Contracts aren't uncommon here in WA. The terms of that one are different than most. I typically negotiate ones from 6 months to 2 years, unless it is land, then up to 5 years. Lease Purchase Contracts are far better for the Seller (not an option at the end...). You can still get out of them, but lose anything you put in, including your Earnest Money, usually. 

When I am working with folks with credit issues, but they show to be good risks for improving their Credit Scores, I do assist them in finding Lease Purchase situations.

There is risk with these types of Contracts (Sellers can mortgage the properties, then default on them, or default on the current mortgage, or in this case, not make the rent payments...).


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## oregon woodsmok (Dec 19, 2010)

Buying the trailer and paying the park rent are two separate issues. If he doesn't pay the park rent, the park can evict him or foreclose on the home.

Whoever is selling the home can also "foreclose" if the payments aren't made, but in this case it would be an eviction because your friend is making "rent" payments, but not actually getting the title until the very end.

Money owed to 2 different people and either one can foreclose if the payments are not made.


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## Evons hubby (Oct 3, 2005)

I use lease with option to purchase contracts on a regular basis when selling properties to folks who cant get a regular mortgage. Most of mine are set up for 20 years. Its a very common practice in my state and serves both buyers and sellers quite well. Its not nearly as tough for a seller to reclaim a property in the event of default, and it provides buyers with the opportunity to own their own property who would otherwise not be able to purchase.


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