Posted by JT-IN on November 14, 2006 at 08:01:23:
Each party is a guarantor to the contract, and thereby jointly and severally liable for the execution of the contract. The fact that they have split is not your problem, and if it were me, I would NOT relieve one party from the liability from the agreement… unless it was to your benefit to do so. Almost always the answer to that question would be NO.
You must honor their option to purchase, regardless of their Divorce, should they become a ready, willing and able purchaser. However, in this case the husband would need to assign his rights to the X-wife and she would need to qualify for mtg and purchase on her own, in order for her to complete the purchase side of the agreement. Again, just because the x-husb grants his rights to the x-wife, this does NOT relieve him from his responsibility to you, and for future rent payments under the lease, unless you acquiesse to his request for a release.
Unless the remaining party, in this case wife, can qualify for new mtg on her own, then I would not consider allowing her to stay with any modification to the agreement. She does have the right to continue to stay, without modification, regardless of the divorce… It will most likely effect her ability to exercise the option, and you may eventually get the property back. You simply need to look at the remaining party financially, as if you were entering into the deal a-new… If this is someone that you NOW rent to, option to, then maybe it is not a bad thing. Otherwise, I would sit idley by until the clock runs out, or she/they default on the lease, then take appropriate action. Now if they both wanted out of the deal, that would be easy… but that doesn’t sound like what you are dealing with here.
Their unfortunate life event doesn’t need to have any impact on your contractural terms, unless you agree to them in writing. Simple as that.
JT-IN