Lease Purchase Tenant Gone Bad - A Must Read For Real Estate Investors
Posted by Blueeyes at 11/25/2007 2:51 AM 
Categories: Investing, Interesting, Business, Legal, Real Estate
Categories: Investing, Interesting, Business, Legal, Real Estate
Below is my email response to a question that was posted in a local real estate investing forum. The original question was about a lease purchase that had gone wrong. The tenant had paid the original down payment and first months lease payment with a bad check and had already moved in and taken possession. The landlord was the only one with the lease agreement papers and the tenant had not been provided with any copies of what they had agreed to or signed as of yet. The landlord went to court to get the tenant evicted and the case was thrown out of small claims court and the landlord was told to proceed to district court and a much longer and more expensive process to evict. They were wondering if there were something else they could do to get the tenant out.*
You need a newer attorney (recent grad or similar) thats hungry and they are more willing to do grey area stuff - not illegal but possibly questionable or marginal areas of the law - unless you have a great established relationship with a powerful and well connected attorney. Attorneys do sometimes break laws, lie, etc... and things on their own for clients in certain situations - don't tell me they don't. It all depends on how hungry the attorney is, how important the business client is and what the payoff is. This happens all the time. I am not advocating any law breaking here! I am just stating that this does go on pretty much everywhere in the business world.
You need a newer attorney (recent grad or similar) thats hungry and they are more willing to do grey area stuff - not illegal but possibly questionable or marginal areas of the law - unless you have a great established relationship with a powerful and well connected attorney. Attorneys do sometimes break laws, lie, etc... and things on their own for clients in certain situations - don't tell me they don't. It all depends on how hungry the attorney is, how important the business client is and what the payoff is. This happens all the time. I am not advocating any law breaking here! I am just stating that this does go on pretty much everywhere in the business world.
This is clearly a case where a hungry lawyer that knows how to ride the grey area will come in handy. Regardless what the law states, if tenant truly doesn't have a copy they are screwed or soon will be.
Do you know how many car dealers in Charlotte have their customers fill out an extra finance application in the event the banks rate changes (or the dealer wants to make more profit or has to fudge the numbers once the customer gets too attached to the car? Almost all of them! This is a violation of federal law - just look it up at the FTC website.
Yet, the payoff far exceeds the trouble one could get into - why? Because the customer can only state that they signed a blank application and has no proof of it. Yes, this matter goes to court about once a month and guess who always wins? The car dealer whom fudged and broke the law and has the high priced attorneys.
Why did O.J. get away with murder? He had attorneys that were the best and flouting the law and turning things completely around "If it doesn't fit you must aquit!" - remember those famous lines?
Basically, a good attorney - especially one you've built a long relationship with can make things like this very easy for you.
They can under the table take the right people out to dinner, float them a few crispy $50's or $100's and make the matter smoothly come to a quick close for the person that hired them.
They can also dig up and find little known loopholes or maybe even threaten them with the crime of writing a bad check with intent as they knew their bank account was closed long prior to their writing it out.
In some states and courts that is sufficient grounds to terminate any lease/rental agreement as it was initially made under false pretenses. It's like lying on a credit application (and maybe they did this on your lease application too?)
They may move out on their own free will on this alone - it all depends on their circumstances. If they knew this well before hand the criminal act (I believe it is a misdemeanor) MAY supercede and make it so possession was not lawfully granted or so on... Maybe there's some recent criminal activity in the tenents recent past that could come into play here? Maybe the tenants done this before? There's all sorts of things that the right attorney has at their disposal and could bring into play here.
Most people that are fairly well off know an attorney that can easily make traffic tickets, speeding tickets, etc... easily just vanish. Some know attorneys that can do the same with even felonies - obviously this depends on the publicity involved and the costs involved will easily skyrocket.
This is a question for a good, hungry attorney or a pricy, well established attorney like a partner in the big firms (whom can sometimes just make a quick phone call and make everything go away). With the right attorney the tenant would most likely have legally been out a long time ago. And you would have the piece of mind that you did it through an attorney and the tenant will not have much recourse and they usually will not even try when there is an attorney on their case from the start.
Their side could only come after you if you did something negligent. They obviously have no money and already wrote a bad check, so their only hope is a public assistance type of attorney whom will most likely not take their case as they have no where to stand. Free pro bono attornies are few and far between so they cherry pick obvious cases and will most likely leave ones like this alone - unless there is more that we do not know here.
Money can and will buy you anything you want for a price - you just have to know the right people and lawyers usually do know the right people.
No, I am not a lawyer and I am not providing legal advise. None of this is advise to break, circumvent or disregard the law. I am just telling you what goes on in the real world of business and politics every day.
I completely agree with ***** below that that is how the law sees things and will proceed if you represent yourself or have a completely honest attorney and the other side is completely honest and so forth (which would only happen in a perfect world). There are other ways, although I am clearly not advocating them, I am just stating that they exist and that they are used daily in the real world of business and politics.
In legal situations you need to cover your A** because the other side could and will lie, cheat and steal if you let them. Don't think they won't. Why do you think that the rich of Charlotte all have a lawyer on speed dial - and a high priced powerful one at that? Bacause at a moments notice they can get them out of jail from a DUI, get the DUI dropped on technicalities (this happens more often here in Charlotte than almost anywhere else), quickly fix situations like this (the rich don't always do things the way they should so their lawyers are always constantly correcting things for them), etc...
Charlotte and the world is full of opportunists from professional tenants that know their rights to drivers that play games with insurance fraud like waving you on to back up in a parking lot and then driving forward so you hit them. If no one else is around or their car is full of witnesses and you are by yourself, your insurance will probably end up footing the bill.
The best advice I can give you is to go and speak to an attorney. Better yet speak to several and find the one that fits your needs best. They cost money, but they are well worth it as they will stand behind you in court if needed.
* It is important to note that I am not an attorney and don't claim to be one. This is not legal advice and is just my opinions and rantings of the current business world. You are advised to seek a licensed attorney for any legal advice you may need and this is also stated several times in the email above.
What is your opinion on this? Remember your opinions and comments are always welcome here at Bestbraindrain.com!
What is your opinion on this? Remember your opinions and comments are always welcome here at Bestbraindrain.com!
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