Re: Help with protection in a L/O - Posted by JohnBoy
Posted by JohnBoy on February 09, 2002 at 23:38:07:
The contract itself offers no protection at all, other than obligating the seller to sell the property to you before the option expires.
The memorandum offers very little protection. It only clouds the title and “might” prevent the seller from selling the property to someone else. It doesn’t protect you from other liens that could be recorded against the property caused by something the seller did.
The performance mortgage offers the best protection because you could use that to foreclose on the property should the seller breach his contract or cause other liens to be recorded against the property. Any liens caused by the seller to be recorded against the property would be second position behind your performance mortgage. If the seller didn’t have the money to pay off the liens so you could get clear title then you could foreclose on the property and have the liens wiped out through foreclosure.