Maintenance question for Matt B and others - Posted by Lisa

import · April 21, 2000, 5:13pm

Posted by MDonovan on April 21, 2000 at 17:53:14:

First of all, you make it plain from the beginning that they are buying the house, not renting. “I am not your landlord, I am the seller and the bank. You wouldn’t call your bank to tell them the toilet is stopped up, would you? If you call me to fix anything, I will be happy to refer you to a handyman, but that’s it. Its your house.” You could give them a guarantee of six months on the roof and the heat pump, but that’s about all.

If they don’t make the repairs, you can make the repairs yourself and add it to the option price (with interest). Just put it in the option contract.

Remember, either you or your T/B will wind up with the property. Its not going back to the seller unless you have a major problem. You need to keep the option money for emergency repairs and vacancies. Also, all repairs are deductible.

import · April 21, 2000, 5:13pm

Maintenance question for Matt B and others - Posted by Lisa

Posted by Lisa on April 21, 2000 at 17:13:57:

In Matt Bs FAQ posted on the Money making ideas page, he states the following:

Q What are the benefits of selling my house on a lease option?

A When PA Home Solutions, Inc. lease options a house, we guarantee in writing that all maintenance, repairs, taxes and insurance will be paid by us while we are selling your house to a sub-tenant/buyer.

My question is how can the maintenace and repairs be guaranteed? It was my understanding that the tenant/buyer is responsible for these costs (however, I am unclear as to how you negotiate this). Can anybody (hopefully Matt will have time to respond too) tell me how you negotiate the maintenance and repairs. How much is reasonable to expect them to pay for, how do you prove they did these repairs, how do you know if they are even capable of performing these repairs? What if they hire out to fix the toilet and that cost exceeds the amount you negotiated, or they fix it themselves and screw it up, costing them more money than it should have?

So basically Im concerned about two things. First, negotiations concerning the repairs (fix what at what cost).
Secondly, how do you know they’re doing what they say they’re doing and they’re not screwing it up? Any information will be much appreciated.

And heres one for Matt: “all maintenance, repairs…will be paid by us” Do you collect the money from the t/b and do the repairs yourself? And this one here: “In situations like that, we continue to pay all the expenses for the house, while we find another qualified tenant/buyer to put into the home.” Is this an easy process or have you had to pay somebodys PITI for months before finding a new T/B?

Matt, I think you have great ideas, Im just trying to understand them. I look forward to hearing from you and everyone else.

Thanks in advance,
Lisa

import · April 21, 2000, 7:32pm

Re: Maintenance question for Matt B and others - Posted by Laure

Posted by Laure on April 21, 2000 at 19:32:00:

In my L/O paperwork, which comes from Bill Bronchick, by the way, it states that the L/O Tenant pays for ALL Repairs, except what is stated by Law. I also pre-qualify my Tenant Buyers before Optioning to them, so I know in advance that they will be able to buy in a year, or two (on some houses). I run them right through my mortgage broker before I let them have the house. With such a reduced amount of time as a Tenant, repairs aren’t usually much of an issue.

Laure