Posted by Bud Branstetter on June 05, 2000 at 13:35:49:
The three day right of recision you are think about are the sales contract you sign in your home. It is also true on the home equity loans here in Texas.
Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by Tarun_md
Posted by Tarun_md on June 05, 2000 at 01:26:54:
On the first of this month, I signed a lease and an option agreement with this couple(my prospective t/ber’s) on this sandwich lease deal(I am in the middle). They gave me a $500 deposit and were going to give me the rest(about $6500) before moving in. The agreements are contingent upon the current occupant/owners finding another place.
The tenant/buyers call me today(4th of June) and tell me that they now want to back out of the deal and want their money back. OUR AGREEMENT CLEARLY SPELLS THAT IF THEY DEFAULT, ANY MONEY GIVEN TO ME WILL BE RETAINED BY ME AS LIQUIDATED DAMAGES.
They tell me that becase they have verbally told me within 3 days of signing the agreements, they can LEGALLY get out of it. According to them, their attorney says that they can. I think its bs.
Is there any law that allows tenant/buyers to back out within 3 days of signing a lease and option agreement. If there is no such federal law, is there some law like that in Maryland?
Thanks
Tarun
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by Laure
Posted by Laure on June 06, 2000 at 07:04:00:
State of Illinois …YES. This is real. I understand that with any buyer of any product. There is a 3 day right of recision. I closed on a house last week. It was a re-fi for the buyers. I had to wait 3 business days to get my cash. Closing company said they had 3 days to back out of the contract. ie. contract with the Lender, as my deal was solid as stone…“right of recision”
Give the money back and go on.
Laure 
Get it in certified funds - Posted by Bud Branstetter
Posted by Bud Branstetter on June 05, 2000 at 13:49:24:
Last week I went to JP court on a case where I was the trustee of the land trust. The T/B had given a personal check for the deposit(option consideration). She did not have it in the back and after a week she stopped paymet on the check. The contract clearly stated the money was not refundable. The Judge agreed. So there is now a $1000 judgement against her-if we can collect.
Moral
Get enough up front and in cash, no personal checks
I agree with Piper and Lori… - Posted by BR
Posted by BR on June 05, 2000 at 12:08:09:
on handling of the option.
FYI:
Here in Oklahoma you have ten days in which you can back out of a Real Estate contract. It’s called the “Ten Day Right Of Recission”. The clause says for results of inspections, investigations etc… but generally if you want out there are no questions asked.
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by JPiper
Posted by JPiper on June 05, 2000 at 11:18:33:
Can’t tell you about Maryland…I’d ask an attorney…but in most states there is no 3 day right of cancellation to a real estate contract. There is a right of cancellation to some consumer contracts, and to refinances.
When I take a property off the market, quit marketing, stop my ads, etc…if the guy backs out I don’t return a dime. Talk to your attorney for the law in Maryland, but if it is as I think it is, I’d tell them to pound sand.
JPiper
Re: There is no buyer remorse on contracts - Posted by Lori Samson
Posted by Lori Samson on June 05, 2000 at 10:19:11:
I had this very discussion 2 days ago with someone I mentor up in North Texas. He took this to Bryan Dunklin the local real state attorney and he says there is NO buyer remorse in a binding contract like an option. They are buying the option not a product. I have kept many partial option payments of 500 over the years and have never had a fight over it or have I had anyone go to an attorney. Remember, that if you go to an attorney and they agree to help them pursue getting their money back they will spend 500 to the attorney for trying and a lot more if truely pursued! I think it is a bluff! Maybe they just called someone giving a quick discription of the facts to an attorney. E-mail Bronchick to see what his experience is. I love it when someone backs out at the starting gate. If they caused me to tie up the property and take it off the market even for a few days, they have cost ME something. I don’t think it’s an issue of good business but more of a matter of making sure you tell someone who puts a partial option payment down that if they change their mind they should reconsider putting the money down because it is at risk if they back out. If they know that up front they are not likely to came begging for it back. Lori
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by SCook85
Posted by SCook85 on June 05, 2000 at 08:20:34:
Tarun,
I don’t know if it is a MD law or a Federal law, but I do know that buyers in MD have up to 72 hours to back out of a contract and get there full deposit back.
I also agree with David. It is just good business. It is not like they came back to you 3 weeks later after tying your home up forever and then ask for the money back.
I hope this helps,
Steve
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by David Alexander
Posted by David Alexander on June 05, 2000 at 03:47:33:
I know their is a law like that in Texas. Also is a federal law given people the right to back out on certain kinds of sales. I would check it out before I made a big.
Besides, How long will it take you to find another tenant buyer. My opinion it would be just good business, just a thought.
David Alexander
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by Vic
Posted by Vic on June 06, 2000 at 17:11:08:
Laure,
In my state the 3 day right to recission applies to reefinances only, not to new real estate loans.
Vic
One other thing… - Posted by JohnBoy
Posted by JohnBoy on June 06, 2000 at 10:42:39:
That 3 day recision ONLY applies to the loan. It has nothing to do with the real estate contract itself.
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by JohnBoy
Posted by JohnBoy on June 06, 2000 at 10:34:35:
Laure,
That applies ONLY on refinancing real estate. It does NOT apply to other real estate contracts. Even though your tenant was under a lease option or a contract for deed, if the lender is treating the loan as a refi, then you have to wait 3 days before the loan will fund. A refi is the only time a 3 day right of recision applies.
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by JPiper
Posted by JPiper on June 06, 2000 at 09:02:41:
A right of recission for a refi…yes. No right of recission for a real estate contract in most states. Check your law.
JPiper
Re: I agree with Piper and Myself… - Posted by Lori Samson
Posted by Lori Samson on June 06, 2000 at 24:59:11:
I still think you are confusing the terms here. When you buy an option, you are buying the right to have that consideration to purchase. There is a big distingushing difference between a sales contract to buy a property and buying the RIGHT to have an option to buy.You are buying the right to make up your mind the way you want to at the end of an agreed time or before… instead of committing to a binding agreement (Sales Contract) saying you WILL preform on a contract and WILL BUY THE PROPERTY. Is that talking in circles? There is a difference between if you look at the function of the agreement to which you are putting money down on. Lori
Re: I agree with Piper and Lori… - Posted by JPiper
Posted by JPiper on June 05, 2000 at 12:46:57:
Don’t know the Oklahoma law either…but is this 10 day right of recission a statute in Oklahoma, a statute which gives the buyer the right to unilaterally terminate the contract for virtually any reason? Or is the 10 day right of recission a contract clause in common use in Oklahoma (a contingency), one which gives the buyer the right to terminate the contract if an inspection does not meet their approval? Big difference between the two.
JPiper
Re: Can a tenant/buyer cancel a lease and option agreement within 3 days of signing it and not breach it? - Posted by Redline
Posted by Redline on June 06, 2000 at 21:22:24:
Don’t know if this was mentioned elsewhere (didn’t read whole thread) but in NJ we have a 3-day “attorney review clause” on ALL real estate related contracts that allows either party to cancel for whatever reason.
RL
Re: There is no buyer remorse on contracts - Posted by David Alexander
Posted by David Alexander on June 05, 2000 at 11:02:20:
Interesting, didnt know that about the option. So that makes it different. Good to know.
David Alexander
Glad you asked! - Posted by BR
Posted by BR on June 05, 2000 at 15:06:29:
I ‘assumed’ that it was a statute it has been around so long in Realtor and Burkhart contracts available everywhere here. To my surprise, thanks to Jim I checked into it and as he suggested it might be, it is just a clause the Realtors have added to thwart possible lawsuits. There is also a Residential Property Disclosure Statement (legal size form with tons of questions which would make it very easy to find a reason to back out) that IS required by statute for sellers to fill out and sign not more than 180 days before the date the form is recieved by the purchaser. Bottom line is it is not hard to get out of a R.E. contract in Oklahoma especially in the first 10 days. Most Realtors I’ve talked to will let you out of a contract at the drop of a hat in the first 10 days.
Re: I agree with Piper and Lori… - Posted by Bud Branstetter
Posted by Bud Branstetter on June 05, 2000 at 13:41:30:
Jim,
In Texas we have a seller disclosure of property condition. The buyer has 7 days after receiving it to unilateraly back out. That is why the contract also has an option consideration clause to have them put up money until an inspection that they do not get back.