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Updated over 3 years ago,

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Ron Hepburn
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Help!!! Is there an RE Lawyer in the house?

Ron Hepburn
Posted

I have a friend who owns a SWH in SoCal and he basically has a squatter (MHO) who he has made an arrangement with a property he bought back in '07 - '08. Here is the basic situation. The lessee family are living in the house and were paying rent (some modified lease agreement). After some time, because my friend bought at the height of the market, his mortgage and expenses were burdensome. After a few years, he entered into a "option to buy" arrangement where the tenant would "float" an interest free loan as a "good faith" deposit to be in a "right of first refusal" to purchase the home from my friend (notarized and everything) in the near future. That agreement also included the renter would cover all monthly loan obligations as the rent. That was basically 10 years ago. The lease agreement expired years ago and now it's kinda month to month situation and the renters (I call them squatters) are continuously behind multiple months (3+) where my friend has to pay his mortgage despite the rent not paid on time. The renter now claims COVID problems on his income and he has not been able to secure any sort of financing to make good on the "OTB" agreement. Since he's been behind on payments, my friend said that he will deduct and outstanding payments from the $50K to cover the debt service. The renter agreed to the terms. They are about half way through the original $50K at the moment. Here's the dilemma. My friend's mother wants to move to SoCal and either live at the property and cover the expenses or buy the house outright. Question: Is there a way to get out from the "OTB" without much recourse? 2) being that there is a moratorium on evictions and him wanting to rent/sell the house to his mother. Can he evict even though there's no lease agreement in place, just a "gentleman's agreement" on the usage of the $50K? 3)What if he deeded the property to his mother without a sale, could she evict and my friend not be in breech of the original OTB? If there are any RE lawyers out there who can advise on this situation, please feel free to reach out to me. My friend doesn't know I'm doing this, but I want to help him. I'll greatly appreciate it. p.s. My friend is willing to restore the full 50K back to the renter, take the loss and even buy the OTB back if need be. I'm just looking for different avenues that might be available for him. And by the way, it's really for a friend. It's not me.