[CF Student]

CF Student

Hello all,

We have a tenant with a lease & option. They plan on exercising their option and buying the property at the end of the month. A tree fell on part of the property over the weekend. They informed us and we scheduled our vendors (licensed and insured) companies to remove the tree and patch the roof.

Per the option agreement we must preserve and repair the property as needed. They are responsible for any repair costs and if we incur the costs the amount is added to the option strike price + 10%. I think they were concerned about not getting approved for the loan they are using to buy the house or that they would fail their bank’s upcoming inspection for the loan.

They went ahead and cancelled the work our guys were sent to do and did it themselves. So I think they solved the immediate repair problem and on their own dime. (yet to review) But per the option agreement they are supposed to get approval in writing for any non cosmetic repairs, etc.

Technically I think they have not complied with their option agreement, but if the repairs are done, although we are not happy about the liability risk they caused by doing work themselves and with their own contacts, what steps if any should we take? Hold off on any action and see if they close end of the month? Send them notice of their violation of the option agreement and determine how to remedy or void the option?

Or? I don’t want to split hairs, but we do always want to stick to our agreement for all parties.

Thoughts?

Thanks all!

[Ben Souchek]

Ben Souchek

I may consider inspecting the work/repairs that they did to ensure they were done correctly. Otherwise, I would wait on any action to see if they close at the end of the month.

Just my two cents…..

Ben

[DON WEDE]

DON WEDE

Dito

[Jackie Lange]

Jackie Lange

Your property insurance would have probably covered a tree falling on the house. To expect a tenant/buyer to pay for these repairs is not reasonable. If they caused the damage, then I can understand them paying for the repairs. But a tree falling on the house should be covered by your insurance. You should not use this as an excuse to cancel the option.

You should inspect the repairs to make sure they are done correctly. I would think their lender will require a complete house inspection anyway. If the work was not done correctly, then you will find out from the inspection report.

[CF Student]

CF Student

Thanks for the feedback!
Agreed, we would not use this as an excuse. We try to help our optionees close. The insurance has a high deductible and the repairs would not exceed it. The tree work was done by a friend who used a chainsaw on the roof in the rain. This isn’t acceptable, this puts the landlord at risk of loss and is not in compliance with our agreements.

There is more work to be done. We sent them a notice of noncompliance because of the tree work and to prevent them from doing something similar on the roof work or in the future. At least it is documented.

We are here to help them close, but they don’t seem to want an open dialogue, when we inquire about closing details they ask us to direct questions to their attorney. This leads me to believe we should transact strictly by “the book” our agreement.

As of now we are planning to have our licensed professionals do the repairs, add the repair cost to the strike price, and see what we can do within our agreement to help them close.

Thanks again!