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Subject: HOA wants to evict roomates
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Author Messages
RoyalP
(South Carolina)

Posts:701


11/11/2018 2:16 PM  
can't include coding in quotes

the following hot link should go to IRS home page

Internal Revenue Service
RoyalP
(South Carolina)

Posts:701


11/11/2018 2:23 PM  
[left arrow]a(space)href=(complete url)[right arrow](visible text)[left arrow]/a[right arrow]

[left arrow]a href=https://www.irs.gov/[right arrow]Internal Revenue Service[left arrow]/a[right arrow]


YEEAAAH
RoyalP
(South Carolina)

Posts:701


11/11/2018 2:37 PM  


D'OH
RoyalP
(South Carolina)

Posts:701


11/11/2018 2:39 PM  
Moderator(s):

Thank you for allowing me to learn using your bandwidth.

Please delete my 'learning posts' as you see fit.

John B.
JanetB2
(Colorado)

Posts:4168


11/13/2018 9:43 PM  
You are not potentially just a lease ... you are essentially considered to a certain extent an Owner. WHY ... because your contract is to “purchase” via your lease. You have Legal Equity Ownership in the home yourself via your contract. The HOA needs to take that into account along with the fact you are also “grandfathered”. It is not like you are leasing to RENT ... you are leasing to PURCHASE. There is a huge difference ...
CathyA3
(Ohio)

Posts:243


11/14/2018 4:47 AM  
Posted By JanetB2 on 11/13/2018 9:43 PM
You are not potentially just a lease ... you are essentially considered to a certain extent an Owner. WHY ... because your contract is to “purchase” via your lease. You have Legal Equity Ownership in the home yourself via your contract. The HOA needs to take that into account along with the fact you are also “grandfathered”. It is not like you are leasing to RENT ... you are leasing to PURCHASE. There is a huge difference ...




I agree that someone in such a situation has a different mindset: they intend to purchase rather than continue renting. However, the owner of the property is the one whose name is on the title. Does someone put an asterisk after the owner's name and says "hey, there's a wannabe owner here"? Will the county come after the wannabe owner if the real owner fails to pay property taxes? Does the wannabe owner carry an HO6 insurance policy, rather than just contents insurance? Was the HOA a party to the lease-to-purchase agreement (rather than it being a private agreement between two individuals)? Do the community CC&Rs recognize a wannabe owner's status is any way? No? Until these things happen the OP is not an owner, or a sort of owner, or a "certain extent" owner; intention doesn't count. Previous commenters have mentioned ways in which this situation can fail to result in a actual transfer of ownership. Channeling Yoda here: "Own or own not; there is no try."
RoyalP
(South Carolina)

Posts:701


11/14/2018 4:53 AM  
'google' deed of trust
CathyA3
(Ohio)

Posts:243


11/14/2018 6:04 AM  
Google sez:


What us the Difference Between Deed of Trust and Lease Purchase?

First, let's start with the lease option, which is really two things, a lease and a purchase option. A lease is a contract for the use and possession of land, creating a landlord/tenant (or "lessor/lessee") relationship.

A purchase option is a unilateral agreement wherein the optionor ("seller") agrees to give the optionee ("buyer") the exclusive right to the purchase the leased premises. The option price is generally set at a fixed price at the inception of the lease, although it does not have to be. At any time during the option period (which generally corresponds to the lease period), the tenant can exercise his option to purchase.
An option is not the same as a regular purchase contract, which is a bilateral agreement. A bilateral contract legally binds both parties to the agreement, whereas an option only binds the seller. An optionee is not bound to buy; it is his option do so (or not to do so).

*** A lease with option arrangement is not a sale, but rather a landlord-tenant relationship. *** In rare cases, a court may re-characterize the transaction as a sale if it looks like a sale. Furthermore, the IRS does not classify a lease option as a sale until the option is exercised.

Contract for Deed

A contract for deed (aka "installment land contract") is an agreement wherein the buyer makes installment payments on an arrangement similar to an automobile financing. The seller holds legal title to the property as security for payment, while the buyer has "equitable" title. When the buyer pays the full amount due under the contract, the seller delivers legal title to the buyer.

Equitable title gives the buyer the right to live in the property, improve it, rent it and otherwise enjoy all of the benefits of ownership. However, since the buyer does not have legal title, he cannot use it as collateral for a home equity loan (although in some states, banks will lend against an equitable interest in a contract for deed).


SO... lease to purchase is not the same thing as a deed for contract. In neither case does the would be buyer hold the actual title to the property. In the first case, the buyer is legally a tenant. In the second, the buyer has many of the rights of an owner but does not hold title, which is held by a neutral third party.

This is something to let the lawyers sort out. If I were on the board of the OP's HOA, I'd be talking to the attorneys to make sure we know exactly what we're doing since there is a whiff of lawsuits in the air.
RoyalP
(South Carolina)

Posts:701


11/14/2018 7:43 AM  
.... hence my advice to the OP re:

attorney

contract of sale

deed of trust


JanetB2
(Colorado)

Posts:4168


11/16/2018 10:43 PM  
Posted By CathyA3 on 11/14/2018 4:47 AM
Posted By JanetB2 on 11/13/2018 9:43 PM
You are not potentially just a lease ... you are essentially considered to a certain extent an Owner. WHY ... because your contract is to “purchase” via your lease. You have Legal Equity Ownership in the home yourself via your contract. The HOA needs to take that into account along with the fact you are also “grandfathered”. It is not like you are leasing to RENT ... you are leasing to PURCHASE. There is a huge difference ...


I agree that someone in such a situation has a different mindset: they intend to purchase rather than continue renting. However, the owner of the property is the one whose name is on the title. Does someone put an asterisk after the owner's name and says "hey, there's a wannabe owner here"? Will the county come after the wannabe owner if the real owner fails to pay property taxes? Does the wannabe owner carry an HO6 insurance policy, rather than just contents insurance? Was the HOA a party to the lease-to-purchase agreement (rather than it being a private agreement between two individuals)? Do the community CC&Rs recognize a wannabe owner's status is any way? No? Until these things happen the OP is not an owner, or a sort of owner, or a "certain extent" owner; intention doesn't count. Previous commenters have mentioned ways in which this situation can fail to result in a actual transfer of ownership. Channeling Yoda here: "Own or own not; there is no try."


Posted By CathyA3 on 11/14/2018 6:04 AM

This is something to let the lawyers sort out. If I were on the board of the OP's HOA, I'd be talking to the attorneys to make sure we know exactly what we're doing since there is a whiff of lawsuits in the air.


Yes and if as OP noted he was also “grandfathered” ... I would potentially be filing one of those suits myself.

Potentially we need clarification from OP as to whether he has a “Lease-Option” or a “Lease-Purchase” agreement. A Lease-Purchase is a lease agreement with a sale contract attached to it. Essentially a “guaranteed sale” of the property which an individual is making payments for the property.
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