Letting go of multiple properties, some under Lease option

[dougmug]

I am letting go of 5 properties, 3 of them I collected lease option down payments. One was for $15K. What happens to the renters? Can I be sued if I don't file BK

[dougmug]

anyone??

[HHM]

It depends on the wording of your lease option contract.

Ideally, the purchase option money was put into a TRUST account (my guess is, since you are worried about being sued, you did not do this).

But yes...if you let the houses go and do not honor the purchase option money or refund the purchase option money to the renters, you can be sued (and odds are, that is not a debt that can be discharged, and in the BK context, since the purchase option is not, strictly speaking, a debt...but again, some of this depends on how the purchase option is worded.

Basically, you are defrauding the renters.

[253BK]

That is going to be easy since the rent has a lease option and has cash down! Have you told them yet they are going to be moving soon? Also have you been collecting rent? I have been in real estate for years and you really want to be careful with renters most states protect them alot more than they do for Owners!

I would stop collecting rent soon! Or they may sue for paid rent and deposits