taxes and insurance

[curiositygirl]

when i do a lease option if seller is still responsible for taxes and insurance how can i make sure he pays for it when i lease option home

[Dave T]

Why?  Since you are a renter, why is it important to "make sure" the landlord pays his taxes and insurance ?  None of my tenants call me up to ask if I have paid the property tax bill.  Not something renters worry about.

[curiositygirl]

because i have equitable title interest in property the deed will be in escrow with any lease deal I do --- I want to make sure he is paying it so something does not go wrong


i know u can set up 3rd party for mortgage what about insurance and taxes

[defcon]

because i have equitable title interest in property the deed will be in escrow with any lease deal I do --- I want to make sure he is paying it so something does not go wrong


i know u can set up 3rd party for mortgage what about insurance and taxes

tell the seller to make payments to the 3rd party for insurance and taxes. 

again who are you going to trust?

my business model is using land trusts to simulate sandwich lease options.  we have a 3rd party trustee to hold the deed and another 3rd party collection servicing company to collect payments for the lender, HOA, taxes, and insurance and record copies for investor, seller, and tenant/buyer.

its more complex than a traditional lease option, but well protected for all parties involved.

[Dave T]

Are you sure you have equitable interest?  I don't think so.  You bought an option which creates a contract interest, but unless your option consideration is treated as a refundable earnest money deposit, I don't quite see how it gives you equitable interest.

Just how I see it.

[James Andrew]

I am reading this as though you are buying using a lease option from a seller.

It is a good question with regard to trust.

In this market how do you know if the seller is even going to make his payments to the bank?

If his underlying loan is set up with these items being escrowed, the mortgage company will have an interest in making sure the taxes and insurance are paid.

I would think that you would also have a case for "specific performance", if he does not keep up his end of the deal.

With that being said In every lease (and therefore lease option) we do, there is a statement that informs the lessee that the property has a mortgage on it, and as such, their interests are in a junior position to the bank holding the underlying note.