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bartendjoe

Lease/option Default

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I currently have a lease-option contract with a homeowner through May 2007. The contract was assigned to me by another investor with a tenant in the property. The tenants lease expired and they moved out 2 months ago. I have been marketing for 3 months now with little success. I have been unable to find another tenant and the costs are starting to get overbearing. There is a liquidated damages clause in the lease that states the following:

 

LIQUIDATED DAMAGES CLAUSE: In event that Tenant Buyer/s should default on any provision in this agreement, any monies paid by tenant buyer/s shall be retained by seller as full and complete liquidated damages and agreed to settlement in full.

 

Does this mean I could give notice to the homeowner and walk away from the lease without penalty? Would the homeowner have grounds to sue to recoup money for rest of lease period?

 

Any advice would be appreciated.

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Yes. That clause means just that: the damages the homeowner can claim are limited to any monies already paid by the tenant/buyer. This doesn't mean he can't sue. But, the homeowner signed an agreement that appears to limit his claim for damages if you break the lease. Other factors, such as local/state laws, and other clauses that may be in the agreement, for example, may affect all of this.

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Yes. That clause means just that: the damages the homeowner can claim are limited to any monies already paid by the tenant/buyer. This doesn't mean he can't sue. But, the homeowner signed an agreement that appears to limit his claim for damages if you break the lease. Other factors, such as local/state laws, and other clauses that may be in the agreement, for example, may affect all of this.

 

Thanks. I'm located in Texas and don't know of any local/state laws that would override the clause in the lease.

 

He is consulting a lawyer today so I guess I'll know where I stand soon. Recommendations on a Dallas area lawyer appreciated.

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Try Steve at steve@swtlaw.net He's a RE attorney in Arlington. I could recommend my attorney, but nobody can afford him! Including me!

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