[chiroptera]

Agh, title says "lease contract." I mean land contract, as in a house. Can't edit the title....

Not me, a good friend of mine. (Do people often present their problems as "...a friend of mine"...? Ha, anyway this really is for a friend.) I dithered about where to put this question, but since laws vary from state to state I figured maybe a Michigan person had experience.

Bare bones scenario, she is disabled and runs a non-profit animal rescue from her home. And trust me, these is NO profit in this! Husband, well let's just say basically a waste of air - self "employed", works sporadically, not eligible for UE, and has pretty much been out of work for close to a year. Apart from doing some minimal household chores, he pretty much sits around, watches TV, eats and belches.

They're on a land contract in their home, and have not been able to make the monthly (very cheap, $360) lease payments since January. Yikes, I know, I know. Really dumb to let it go this long. However they've kept in touch with the owners, who said that their main concern was keeping the water and property taxes paid.

So yesterday she gets a letter from the owner's attorney, as I understand it giving them 14 days to either pay all the arrears plus interest (which somehow translates to $4,000) or quit-claim the house back and vacate. I was doing some googling around - not sure if this means the same as forfeiting the house or what. She's in a panic, and has been calling around - legal aid no help, her caseworker no help. Husband mad at her because she's not taking care of him and everything else like she ought to...anyway, he's no help either.

I'm going to go over tomorrow and see if I can help by writing letters, going through what paperwork she has, whatever...right now I don't know much. I realise this should have come as no surprise to her and there are no excuses. I imagine what she needs to fix this is about four grand, and I don't know where that will come from. I sure don't have it to give.

So basically what I am wondering is, has anyone been involved in this sort of thing from any angle? How long might she have before she's out on the street with a bunch of animals including the POS husband? What's the process? It appears to be different than being either foreclosed on or evicted from a rental, but I'm having a hard time really understanding the ins and outs of land contracts. Thanks.

[Driller1]

She has all the answers. They are in HER copy of the contract. To me, it sounds like the man just wants his money. Nothing wrong with that.

[chiroptera]

Sigh. I know. I was really upset on her behalf (she's a close friend) when I wrote that yesterday and this wasn't the best forum I guess.

Went over last night, they're in worse shape than I realised and have been incredibly irresponsible letting things go. Lot of backstory... Bottom line is, they need to come up with even more $$ than I said - close to $7000 just to get current on lease, property taxes and water. Property owner says she'll forgive the lease payment arrears if they quitclaim it back to her, move out in 30 days, leaving the house in clean condition. My friend has to pay the back taxes and water bill.

I think the property owner is being beyond reasonable. I told my friend to start packing and think of ways for them to come up with money to pay off the debts. They'll be able to rent a crappy house in the ghetto but that's her only option if she wants to keep her animals.

I feel bad for her and the animals but I'm also like what were you THINKING!!? I understand poor, but I don't understand letting things slide to this extent. Judging by the number of foreclosures and evictions, it happens a lot.

Originally Posted by Driller1

She has all the answers. They are in HER copy of the contract. To me, it sounds like the man just wants his money. Nothing wrong with that.

[MTUCache]

No personal experience, but from hearing descriptions of eviction proceedings in the past (mostly rentals) I'd say she's got a few months anyway, as long as the owner is doing this all through the legal process.

Although it may be months before a judge orders her to vacate and the police show up to watch her pack, she's probably in for some pretty stressful times between now and then. Most owners are just as unfamiliar with the process as the tenants and end up resorting to some desperate (and illegal) acts. He'll likely start showing up and trying to intimidate them, trying to change locks, etc, etc.

Truthfully though, if he's a business man I'm sure he'd see the value of some money rather than no money. If she could find a way to pay the principal payments for a couple months at a time for the next few months it would probably buy her some time. It would take a long while to get caught up (even making double payments) if he's a stickler about the interest payments, but it's at least a way to keep communication open and her in the house.

Then again, if she can't come up with even a couple grand to give him after several months, this doesn't sound very hopeful.

[chiroptera]

MTU, thanks. My only real advice to her was to find a way to come up with, say, a couple of grand, and ask the property owner what she would take in order to let them stay in the house. I drafted up a letter for her to send. As you point out I'm sure the owner would rather simply get the bills up to date, get some money, rather than have to find someone else to rent the house. The problem is, I don't see how they can come up with enough money unless someone just gives them several grand. They are poor people with few resources. The only recourse (and she is pursuing this) is to get some sort of grant or donation to the nonprofit. But that will be difficult too.

Neither of them wants this to go to court...although that would give them more time. But it's not right. The property owner shouldn't be stuck with the back taxes and other bills. At least my friend and her husband have done a lot of improvements on the house (recarpeting, new fence, a lot of small improvements) and they have kept it up nicely. So if it goes back to the owner, at least it will be in better shape than it was three years ago.

Having been a landlady myself, I can assure you I would not have been nearly as patient!

[JGatti]

My sister in law sold her house on a land contract and owns a mortgage company as well. In her case this is what I was told.
Land contract always benefit the seller. Her's and I'd think most are worded in a way that the buyer has X amount of time to purchase the home or be found in default, where as owner has right to take home back and kick land contract leasers out on their can. From what I was told these are not like rental contracts because the owner has the right to sell the property under the contract. The woman she sold to had 1 year to finance the balance, so far she has not. But because she is on time every month with her payments my sister in law is able to pay the mortgage on the home. However by contract she could put the house up for sale and because the buyer is in default they can either purchase or lose everything they have put into the house to date.

In your friends case it sounds to me like they are being given a chance to fix the problem. If she/they can't come up with the money I expect the owners to reclaim the house soon and I don't think your friends will have a leg to stand on. But like the others have stated. Read the contract, see how the owner has it stated. They should be able to walk away and the owner will most likely sue them if he is not already. But if they have nothing he can't really get anything then can he?

[trinkit]

Originally Posted by JGatti

My sister in law sold her house on a land contract and owns a mortgage company as well. In her case this is what I was told.
Land contract always benefit the seller. Her's and I'd think most are worded in a way that the buyer has X amount of time to purchase the home or be found in default, where as owner has right to take home back and kick land contract leasers out on their can. From what I was told these are not like rental contracts because the owner has the right to sell the property under the contract. The woman she sold to had 1 year to finance the balance, so far she has not. But because she is on time every month with her payments my sister in law is able to pay the mortgage on the home. However by contract she could put the house up for sale and because the buyer is in default they can either purchase or lose everything they have put into the house to date.

That all depends on how the contract is written. Some land contracts have a term of just several years. I have bought 3 houses on land contract and sold 1 on land contract. They all had annual principal-only payments (between $2-5000) and they had terms that ran the course of the payments. In other words, the final payment went to the seller in exchange for the deed. All of my land contracts stated that neither the buyer nor the seller could sell without the other's written consent. On the other hand, all my land contracts also stipulated penalties should the buyer default.

[dragon_fly_12]

I think you also need to advise your friend, moving forward, that she needs to take care of #1 before she starts taking on #2, 3, and 4. I am a huge animal lover and have done my share of rescue work as well. Non-profit or not, it still drains the resources, and if she can't afford her home, how can she afford proper care of the animals? You have to know your financial limitations, and I think your friend took off more than what she can handle. If she wants to continue to help animals in need, every shelter across America is looking for volunteers!

[chiroptera]

Thanks chance, and you are very correct. In fact on the advice of several people, she has found rescue/foster homes for some of the cats in her care (I took one, like I need another cat....hey if anyone wants an adorable 12 week old Siamese kitty who is affectionate, quiet and loves dogs, PM me....!) We have lots of cats to choose from who need homes, and a couple of dogs too....will even deliver.

But here's the funny thing. She called the mayor's office and the women who answered the phone remined her that technically she was violating city ordinance by having these animals. To which my friend responded - "if the city didn't keep bringing me animals, I wouldn't have so many." Which is absolutely true! She's a federally licensed wildlife rehabilitator, and the city, the local police AND the DNR all bring her animals! Both wild and domestic. Since I volunteer with her, I've gotten calls to go pick up dogs, a couple of local cops have my cell number too. Animal Control here is woefully understaffed and underfunded, cops and various city & county entities sometimes rely on rescues to pick up the slack. Which we do, for no renumeration I might add. Like many, I've spent quite a bit of time and money on animals that weren't mine, and several of them were received from the police. One of my personal dogs came from a kind-hearted cop who found him running around on the north end (ghetto) in June - I took him to foster and ended up keeping him.

No, none of us are hoarders or anything like that! Just in case anyone wonders. I'm compliant with city and county laws re: the number of animals I have in my home. And they are extremely well cared for and trained.

Yesterday morning I went to the city building with her...apparently part of the federal stimulous money has been granted to the city and county both to help people keep their homes. And some of this money is earmarked specifically for people with land contracts. She filled out all the forms, so hopefully there will be some help for her. She may have made some poor decisions - who hasn't - but she is one of the kindest hearted people I know and if anyone deserves a little help, it's her. So there may be hope yet that she can keep her home, especially if hubby works....