Lease w/ Option 2 Buy gone WRONG!!

[Leon F.]

So I bought a property in 2018 from the foreclosure auction in Louisville at the courthouse.

The house was still occupied by the original owner. When I went to talk to him he didnt believe I had bought it and thought there was a mistake and didnt know his house was being auctioned etc.

Long story short. We came to a Lease w/Option to Buy (Rent to Own) agreeement in July 2018.

His Rent would be $550 for 2 years and within that 2 years he has the Option to Purchase for $15,000.

He pays his $550 rent on time the entire time, but makes no extra/additional payments. When I've picked up the rent I've asked if he talked to any banks about loans, etc. And it's always no.

Here we are in July 2020. And he tells me he's ready to make his last Payment and he thought the $550 was ALL PAYMENTS towards the $15k and that he owns the house now etc.

What should I do now?

Anyone else experienced any lease/option misunderstandings?

[Shane H.]

It never ceases to amaze me how reluctant REIs are to engage the services if an attorney. I put a property under contract last week. Being an out of state deal I had my attorney from my home state review it, then I hired an attorney from the state the property is in to review it. And this is just the purchase agreement that came from the real estate broker. I don't understand how people are signing contracts without having them reviewed by their attorneys... I've purchased one property on an installment to purchase. I had the contract written by an attorney. I think that cost me about $400... Would you scrap a deal over an extra $400 in closing costs? If so the deal wasn't very strong. But a few hundred bucks in lieu of thousands of dollars if mistakes. I'll take that any day.