Posted on: 24th Feb, 2009 07:55 am
We currently have a tenant for a property we own. We are renting the property for less than we owe on a monthly basis. Consequently, we are at a point where we can no longer make payments on the property and will have to go into foreclosure unless we find a buyer.
The current tenants are very interested in buying the property and have invested quite a bit in the property by way of upgrades (landscaping, customized window treatments). However, they won't qualify for a loan that will allow them to take over the property completely.
They've offered to take on the full payments for the next two years, at which point, they believe they will qualify for a loan to buy the house. In the meanwhile, they want us to transfer title of the house to them and have drafted a contract to this effect.
We feel this is a good solution, as we do not want to go into foreclosure, and we feel they have enough vested interest in the property to abandon it.
Is this a good idea, and what are the legal ramifications of transferring title of the house but not the loan? Should we put a clause in the contract to protect ourselves somehow?
The current tenants are very interested in buying the property and have invested quite a bit in the property by way of upgrades (landscaping, customized window treatments). However, they won't qualify for a loan that will allow them to take over the property completely.
They've offered to take on the full payments for the next two years, at which point, they believe they will qualify for a loan to buy the house. In the meanwhile, they want us to transfer title of the house to them and have drafted a contract to this effect.
We feel this is a good solution, as we do not want to go into foreclosure, and we feel they have enough vested interest in the property to abandon it.
Is this a good idea, and what are the legal ramifications of transferring title of the house but not the loan? Should we put a clause in the contract to protect ourselves somehow?
if you transfer ownership to the tenants, you will be in default of your mortgage. what will compel the tenants to pay the mortgage?
have you consulted with any lawyers? it sure seems not, from your post. this ought to be the first place to seek out advice.
have you consulted with any lawyers? it sure seems not, from your post. this ought to be the first place to seek out advice.