Cancellation of a Lease Option Contract
Question: In a lease option situation where the tenant/buyer cannot perform and purchase the home at the expiration of the contract can the landlord/sellers list the home back out on the market prior to the deadline? Or do they have to wait until the expiration of the lease? Even if the Buyers know that they cannot move forward.
Answer: Our Lease Option agreement is divided into two parts. Sections 1 through 4 are relevant to the lease portion. Sections 5 through 25 deal with the option to purchase, and deadlines. If Tenant chooses not to proceed with the Purchase Option, then under section 3.2 (Due Diligence) the following applies: Tenant may, no later than the Tenant’s Due Diligence Deadline, cancel this Contract by providing written notice to Landlord, whereupon the Option Money shall be released to Tenant without the requirement of further written authorization from Landlord. So be specific when entering the Due Diligence deadline because if the Tenant cancels after that deadline the Option Money would go to the Landlord. If Tenant determines to exercise the option, then you would use form 33 “Notice of Intent to Purchase Property no later than the Notice of Intent Deadline or section 24 c. That’s the long answer. I believe that the Seller could list the property again prior to the expiration of the lease as long as the Tenant would agree to allow showings.