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Buying or Selling a Home/breaking a lease option to buy

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Expert: Todd C. Menard - 4/23/2008


Question
about 9 months ago i signed a lease option to buy on a 1375 sq. ft. home. now i find that my family needs more space than this house can provide. my lessor has agreed not to sue me for NOT purchasing the home. but he does want me to pay the monthly rent until he finds a new tenet to rent or lease the property. is this legal for me to be responsible for this rent? how long can he impose the unoccupied renting of this property against me?
thank you for your help.
nathan
p.s. I live in pensacola, fl.
    i know laws are different in all states. but any advise would help. thank you.

Answer
Hello Nathan - I appreciate your comment knowing the laws are different. Thank you. I would recommend that you go online and review the Florida Landlord Tenant laws. A quick search provided me with this address (www.megalaw.com/fl/top/fllandlord.php) The reason I ask you to begin here is to determine what the landlord can and cannot request/demand of you as a tenant who desires to break a lease. It could be considered reasonable that you would "agree" to pay the rent during the landlords search for a new tenant provided there are stipulations of what the landlord must do for diligence in finding a new tenant. What I mean is, if you are making the payments where is the priority/immediacy for the landlord to find a replacement tenant? I think there should be a time limit on how long you are willing to pay the rent... say no longer than 60 days (two payments). As it stands right now, yes, you have requested the landlord mutually cancel the contract to which you are bound and he/she has agreed. You do not want the Landlord to come back to you after you have paid those interim payments and then indicate the premises are not in appropriate condition and you owe more! I recommend that the landlord perform an inspection of the property to determine its current condition is in a similar manner to that of when you took occupancy. Once the condition of the property is determined both you and the landlord should have a written agreement that you will also be entitled to a return of your earnest money. If you gave the landlord a non-refundable deposit on the sale portion of the lease purchase/option than you should not agree to pay any further expenses as the landlords position would be similar to you being unable to close on the purchase option at the end of the Lease period. If this were to occur wouldn't you still have the right to vacate at the end of the lease portion and wouldn't the landlord be in the same position as today, looking for a new tenant.. but without you paying the rent? I would recommend that if you did not pay a non-refundable deposit that you implement a time limit to the financial exposure as mentioned previously. Mutual cancellation even though it appears to be in your favor is mutual. Therefore, YOU also have the ability to negotiate... of course with appreciation for the landlords willingness to be flexible and cancel. none-the-less you possess the right and should make certain that you don't position yourself to voluntarily make payments without a time or amount cutoff.   
Contact a property management company and ask how difficult finding tenants are in the current market... they may also have a tenant that could move in right away.. yes it may costs to acquire this new tenant  but you could always pay the fee ($400) and have a qualified replacement right away. Then you would not have to pay any monthly rent! You could also check with the local real estate offices too. Commissions on rentals are usually a flat $300 up to 3-5 of the gross annual rents ($1200 rent x 12 months = $14,400 x 3 = $432.) Still not more than one months rent. Limit your exposure! I hope this helped. - Todd

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Todd C. Menard

Expertise

National Association of Realtors Code of Ethics and Professional Standards * Contract Questions: 05/05 Arizona Real Estate Purchase Contract, Exclusive Buyer Broker Contracts, Listing Contracts and associated contract documentation as it relates to boilerplate, covenants, contingencies, procedures and procedures. * ARMLS Arizona Regional Multiple Listing questions * Real Estate Professional Standards and Practices, Ethics, Obligations, Duties * Agency relationships in Arizona, Procurring Cause * Questions typicaly arising during the listing period * Questions typically arising during the escrow period * Questions about working with a real estate agent/REALTOR * Questions Related to New Home Builders

Experience

National Association of REALTORS Board of Director (2011) Arizona Real Estate Salesperson License (1991-1995), Arizona Real Estate Brokers License (1995-Present), Arizona Association of REALTORS Board of Directors (2008-Present), Arizona Association of REALTORS Professional Standards Committee (2008-Present), AAR Certified NAR Code of Ethics and Professional Standards Instructor, Southeast Valley Regional Association of REALTORS President-Elect (2011) Southeast Valley Regional Association of REALTORS Board of Directors (2008, 2009), Southeast Valley Regional Association of REALTORS Grievance Committee Chairperson (1998-2007), Southeast Valley Regional Association of REALTORS Bylaws Committee (2008-Present), Southeast Valley Regional Association of REALTORS Education Committee (2008), Arizona Association of REALTORS Forms Committee - Residential Purchase Contract (2005), Arizona Association of REALTORS Forms Committee - Residential Rental Agreement (2008), Arizona Association of REALTORS Forms Committee - Buyer Broker Agreement (2009), Arizona Association of REALTORS Presidents Advisory Group, Road to Professionalism (2009), Arizona Association of REALTORS GRI Curriculum Review Committee (2009), Arizona Department of Real Estate, Commissioner's Education Advisory Group Sub-Panel B (2010) Arizona Department of Real Estate, Commissioner's Statute and License Review Committee (2007)

Organizations
National Association of REALTORS, Arizona Association of REALTORS, Arizona Real Estate Educators Association (AZREEA), Arizona Regional Multiple Listing System (ARMLS), American Notary Association, Southeast Valley Regional Association of REALTORS (SEVRAR), Southeast Valley Regional Association of REALTORS Women's Council of REALTORS (2010-Present), Phoenix Association of REALTORS (1994-2000, 2005-2009), Scottsdale Association of REALTORS (1994-2000, 2005-2009), Maricopa/Glendale Association of REALTORS (1994-2000, 2005-2009),

Publications
"Real Estate in 2008"- Lifebushido Publishing (Contributory Author), SEVRAR Magazine, Internet Crusade, RealTown ListServe, Blogger.com, Active Rain

Education/Credentials
- AAR Certified Ethics and Professional Standards Instructor, Graduate REALTOR Institute (1993), Certified Negotiation Expert (CNE), Over 100 Hours of annual real estate continuing education, Annual Ethics and Professional Standards Development Workshops as required by the National Association of REALTORS, Approx. 36 hours of NAR Code of Ethics training annually, Numerous IDW, Seminars and Train the Trainer programs, Business Management Degree - 1981

Awards and Honors
2009 REALTOR of the Year Award, Southeast Valley Regional Association of REALTORS (10,000+ Members), Double Platinum Production Award ($45,000,000 Sales Volume)- Keller Williams Realty Int'l (2001), Top 15 Sales Production Keller Williams Realty International (2001), Top 5 Sales Producation Keller Williams Realty Southwest Region (2001), Top Recruiter Award - Keller Williams Realty Int'l, SW Region (2002), Who's Who in U.S. Executive (1983), Who's Who in U.S. Real Estate Professionals (2007)

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