Now that this whole situation has been fleshed out by the amazing members on BiggerPockets, it's time to move forward with a plan of action.It has been ascertained that the building cannot exist on its own legal parcel and obtaining a variance from the City will be a futile exercise.

This way when you are up for renewal and they're complaining again you've incrementally increased rents and they're still somewhat under market allowing you to exercise your strong landlord guns of the "take it or leave it" position. 2 years isn't very long.

I am perpetually game planning future moves and this exercise inevitably requires taking a position on how the near future will unfold and the best way to benefit.

Two different bodies, they have different forms.Be sure to memorialize or write down whatever options you end up exercising, They should sign a Termination Agreement with you.

Are there exercise facilities?

I would always exercise EXTREME caution when moving forward with unqualified tenants during this time.

-I understand that the 15K deposit to exercise the option to buy will be forfeited if I don't exercise the option.The point of a lease option is to collect money up front as a DP or charge a higher rent, part of which goes toward the down payment if they don't have the dp right now.

@Sharon Miller they are exercising their right as stated in the lease.

@Franky JuwanaBefore looking at creative solutions for taking control of the problem, you need to establish first it makes sense financially.Is the price the seller is willing to accept a good price.Here it is an exercise of looking at the income they property will bring in and deduct all the expenses you will incur or are likely to incur.If you establish you have some positive cashflows then it makes sense.Now to be creative, you need to know what your constraints are?

.- Exercise your right as a landlord to advertise availability of unit the day you receive notice from tenant.