Taxes & Interest on a L/O - Who Pays them? - Posted by Andy Hansen
Posted by Andy Hansen on April 25, 2002 at 20:46:25:
Hello to any & all willing to help,
I have been reading incessantly lately about L/O and have not found any book/post/site that answers the following questions on a consistent basis. Here they are:
First, let’s assume the seller’s monthly mortgage payment does not include the taxes and insurance for the house. He had been paying them out of pocket the previous years. Thus, if I were to do a L/O, should I still have him cover the taxes and interest, or should I have the new tenant/buyer pay them? Bronchick says too be careful if you have the buyer cover them b/c they could possible use it against you in an equity lawsuit down the line if you evict them. If the buyer doesn’t agree to pay for them since he doesn’t own the house, and the seller says he won’t b/c he wants to wash his hands in the whole thing, what would you try to do to close the deal? How often will this happen?
Secondly, a shorter one for you (thanks for staying). Does anyone out there, when using a L/O, actually have the original seller cover the maintenance over a certain $XX/month (say $300), and have the buyer cover anything under $300/month?
Also, what happens if you do write this in the contract, the roof goes bust, and when approached, the seller refuses to pay because he says it is way too much money to pay for a house he doesn’t live in, rent, etc. What would you do?
Thanks a lot for the help. It is greatly appreciated!