hERNANDO cOUNTY, fL.r.e. attorney only- iM HAVING A HARD TIME…

Good morning,

I'm sorry to hear of your dilemma.

As an attorney with a solid background in real estate law, as well as a background as a real estate broker, I can tell you that there are no special pitfalls for a tenant in Hernando County who might consider a Lease-Option agreement on a home. All the pitfalls are pretty much nationwide.

Perhaps one of the biggest risks is that you stand a reasonable chance of renting a home from someone who wants to sell, but can not because of the market so they will lease-option it as a last resort. If the property is underwater, which happens all to often, then you risk losing the property if the lender forecloses on the owner. And while your lease is still good in that situation (more about this below), you would not have the opportunity to buy the home from the owner once the foreclosure was completed--regardless of any contract you had with them---resulting in the loss of any payments that you made during the lease-option that were to go toward the home if you ultimately bought it.

On May 20, 2009, new legislation went to effect--- "Protecting Tenants at Foreclosure Act of 2009." This legislation provides that leases survive a foreclosure -- meaning that the tenant can stay at least until the end of the lease, and that month-to-month tenants are entitled to 90 days' notice before having to move out. Only properties which are bought at auction, or at post auction sale, by an owner who plans to use the property as their Primary Residence may force the lessee out of the property, and they STILL must give the lessee a 90 day advanced written notice of the termination of the lease.

Other pitfalls include the fact that the market is still dropping, and you will likely tie yourself to a sale price in the Lease-option agreement that will be higher than the fair market value of the home a couple of years from now---especially in FL where the housing market has been worse than in many other parts of the country.

Too, as most Lease-Option agreements call for higher than average rent with some of the money going toward the ultimate purchase of the home if you choose to exercise your option. If you do not exercise, then that money is lost.

With a lease-option, you get none of the financial incentives that you would with outright ownership, and you are still paying after tax dollars for the rent.

Rather than a lease option at this point in the market, you might be better off with a traditional lease that simply gives you a right of first refusal should the owner try and sell the property while you are leasing it, or for a period of time following the end of your lease.

I wish you the best in 2011.

Because I help people here, like you, for a living---this is not a hobby for me, and I sincerely XXXXX XXXXX abiding by the honor system as regards XXXXX XXXXX I wish you and your family the best in your respective futures.

Would you be so kind as to Accept my Answer so that I may be compensated for assisting you? Bonuses for greatly informative and helpful answers are very much appreciated. Thanks Again,

Doug