L/O To Someone Filing Bankruptcy?
I have a tenant/buyer/optionee who want sto L/O my house. She is willing to pay 6 months rent up front and 5k in option fee. She was the victim of identify theft (and yes I almost believe her) and she is considering filing for bankruptcy.
I have used the L./O documents and followed the courses by Wendy Patton and Vena Cox-Jones so yes my lease and option contract are signed at the same time, my lease is seperate from my option contract and my lease does not refer to my option contract, etc. I am not offering any owner financing.
So what happens if she files bankrupty before the option period begins - she is just a tenant. And what happens if she files bankrupty within the option period.
Thanks
Brenda
I maybe wrong, but I think I remember someone telling me that if they file BK on you, you can't put them out. And there maybe an extended period of time before you can collect from them also.
Anyone,please correct me if I am wrong.
I agree, L/O is a bad idea with BK around the corner.
I know of someone who had to wait almost a year to put someone out who kept filing BK's. It's not a pretty sight.
[addsig]
I'd suggest to check with your local RE or bankruptcy attorney and see what they say. If they're giving me 6 months rent upfront and 5k option payment (I'm assuming the house is $100-150k in value) then I don't care what they're going to do. If they stop paying then you evict. Just to be on the safe side I'd ask an attorney tho.
-Ryan J. Schnabel
Anyone else have experience with this? My concern is that I'll soon have a little too much experience with this type of case.
That's b/c we just had one of our lease/optionees file bk. They only moved into the house about 5 months ago and they paid a $6500 option fee. At first I was really worried but now I think we're in quite good shape.
They certainly don't want to be evicted (even if it would take a while to do so) since they have a big option fee at stake.
What I'm worried about is whether the bk court would somehow pull the option fee that they gave us back into the bk proceedings? It is a *fee* they paid and not a downpayment. It's not technically an "asset" so to speak.
Also, we didn't have any knowledge of them potentially declaring bk (though I think we may start having t/b's sign something saying they don't plan on it) so I don't think there's a problem with a fraudulent conveyance though I don't know if that would apply in this case anyways since they didn't transfer an asset to us; just cash. It's not like the court could make a grocery store give back the money the people paid for milk or the fee for a haircut a week earlier either, right?
Another thing, if the people do want to stay in the house and have the opportunity to apply their option fee towards their downpayment when they eventually buy, I don't know why they would even mention it anyone about the option they have on our property. And, I don't know why we'd tell anyone that they're anything more than a simple rental tenant.
Does any of this make sense? Does anyone have any further experience with bk's in this type of situation?
If it is a real fee and not a "fraudulent conveyance" to hide assets then I think your safe.