there is a year and a half left on a 5 year lease
i cannot get a loan
can i stay or do i need to sell fast
5 thoughts on “i have a lease option to purchase with 50K equity and my landlord is filing bankruptcy?”
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You can’t sell what you don’t own.
You MUST buy it NOW or you will be forfeiting everything.
You are a renter, all your rights are those of a renter….which is to say you lose.
Sell? What are you going to sell? The $50k of equity must be recorded in a title at the county court house for you to have anything to sell. I suggest you find an (investment) partner to secure ownership of the property asap such that you may use your claimed equity as a discount on the house. Good Luck!
This is exactly the scenario why people should never "rent to own".
You can not get a loan in part because you don’t actually have equity. Why do I say that? You don’t own the home, you have a lease option which means you have a lease with the owner of the property and at the end of the lease, you have an option to purchase or not to purchase the property.
You also can not sell a home that is not yours. The owner still owns the property but you only have the mortgage on it. If you try and sell it, you will be in a legal battle that you will not win, you can even be sued for misrepresentation because you are not the actual owner of the property.
If the owner is filing bankruptcy, it does delay a foreclosure on the property but you will need to find another place to live, just not right away. Unless you can afford the property outright when it goes to auction, you are out of luck.
Please don’t feel you are alone, because there so many more people out there going through similar situations. I’m not being negative here I just want to help you realize what may be in your future.
Are you on the title to the home currently? If not, you have nothing to sell. My guess is you are not.
First the other answers are incorrect….if your lease option contract was drawn up correctly.
What you have of value is the option itself. If the current market value for the property is higher than your option "strike price" then the option can be sold to someone else who then activates the terms of the option and buys the property.
That is unless your option contains clauses that prohibit you from selling it. (Most do not).
I am not saying it will be easy to find someone willing to deal with the pending BK..( For one thing the courts could unwind the transfer of ownership and take the property back into the Bankruptcy proceedings.)
Your best bet is to talk with the landlord and/or his BK attorney with your own legal representation in tow so that you get real answers from people who know what they are talking about.
Good luck to you and yours.