Home Buying in Medina>Question Details

Sheri Vidika, Home Buyer in Medina, OH

Can a person that does not own a property sign a lease to purchase contact without a power of attorney?

Asked by Sheri Vidika, Medina, OH Fri Aug 3, 2007

I did a lease to purchase option agreement and decided not to purcahse the property for various reasons and the so called owner kept my option deposit as per the term of the contact. However I determined after moving out that he did not own the property and did not have a power of attorney at the time he signed our contact. I have a small claims case pending but his attorney is saying he never held himself out to be the owner. Should I dismiss the case?

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No. had you exercised the option you would have learned real quick that he/she had no interest in the property. The contract you had will be the determining factor and if you can prove that the vendor had no right in the property then it is axiomatic they they had no rights to sell. I would do a little leg work here and get with the real owner and see what the relationship is between your vendor and the true owner.

Call the district attorney and file a case for fraud...i got ten bucks says that the you're not the first person to get taken. A few bucks with a private investigator will be money well spent.

if the case qualifies for small claims file there, the defendant will not be able to bring in an attorney. if they do show up with an attorney have the attorney excluded from the court room by the judge or referee.
2 votes Thank Flag Link Fri Aug 3, 2007
you absolutely need a real estate attorney to advise you in this matter. But, as almost everyone else pointed out, unless the deposit is very large, it may be more cost effective to let this go. So sorry for your difficulties! Next time, please be sure to have a buyer's agent represent your interests. Best of luck!
2 votes Thank Flag Link Fri Aug 3, 2007
ALWAYS use a Professional Realtor and a Lawyer! ALWAYS...
1 vote Thank Flag Link Fri Aug 3, 2007
Also, always remember that the advice of an agent is NOT legal advice, nor should it EVER be taken as such. Any time you are invovled in a legal situation, the best bet is to consult an attorney, as we have our clients do. We can give opinions, but it is nothing more than that and is NOT legal advice. I do agree with the thought of weighing the cost against the amount though. Sometimes it costs a bit to learn things and chalk it up as experience, which is fine, and dont feel bad about it, just dont make the same mistake the next time and dont circumvent using a real estate prfessional to save a buck or two, because this is usually how those situations end up.
1 vote Thank Flag Link Fri Aug 3, 2007
If the owner assigned him as the person to handle his affairs, that would be fine, but he would have to have a power oif attorney to do so. You can pursue the small claims case, however, if he never told you he was the owner, then his defense will be that, as his attoorney is already saying. That is why it is important to work with a real estate professional in any and all transactions as to avoid these types of things happening. Again, these type of deals can work well in the right situations, just be VERY leary of the seller who is unrepresented in this type of transaction, as there is usally a reason he or she is unrepresented - either no one would honor the illegal requests, or he or she thinks they are saving mone, when in fact they are throwing money down the drain.
1 vote Thank Flag Link Fri Aug 3, 2007
You need a board certified attorney to handle the case. He may have rights to the house and rights to have have you sign the agreement. He may have purchased the home "subject to" the exisiting mortgage. My guess is that your money is gone. That's the problem with "lease to own" homes. In our experience very very few people purchase the homes, and the person you dealt with gets to keep what is often a very large deposit. In Texas the laws have now changed to discourage "lease to own" schemes, but they are still out there.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Fri Aug 3, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
How much is the option deposit ?

Depending upon the amount of money involved you might want to .....

1. Small amount of money i.e. less than the attorney fee.........dismiss

2. Large amount of money.....i.e. significantly more than attorney fee.......get an attorney and go for it.

Good Luck !
1 vote Thank Flag Link Fri Aug 3, 2007
sheri, can we get an update on the resolution of your court case?

i am very curious to hear what the judge had to say.

thanks mike
0 votes Thank Flag Link Fri Jul 24, 2009
The more I think about this the fuzzier it gets. It seems to me from your question that you didn't get any legal help here or there would have been a recording of your interest. It seems clear that you didn't make any provision to assure that the home would be salable at exercise (an escrow that would make underlying note payments to assure that the home wasn't in default when you decided to buy it). It seems clear that there was no due dilgence to assure ownership...or did you.

Did the Vendor have an option to purchase from the true owner that they sold to you? If they did then they did have an interest that was transferable and you are out of luck. The attorney may be correct to state that the vendor didn't hold himself out to be the owner of the property, just the owner of an Option to Purchase. Attorneys use terms like "owner" with precision...be sure you are not reading into anything they say. He/she Options a property and then Re-Options it to you for Quick Real Estate Wealth...such schemes are the stuff of seminars and there are many twists on the theme.

How much money are you out? Does your jurisdiction allow attorneys in small claims court?
0 votes Thank Flag Link Sat Aug 4, 2007
Hi Sheri: I have a question for you? Did you utilize the services of a property management firm when you entered into the lease purchase agreement - and if you did, did they skip a beat and not validate ownership. The first step a property management company does (as well as listing agents) is determine "ownership".

If this individual "signed" the lease purchase agreement - wouldn't you say he "held himself out to be the owner"?

I think even Judge Judy would deem this to be true - I'm not a lawyer - and I can't give you advice - but you should discuss it with a lawyer - there may be more than just the deposit on the line here.
0 votes Thank Flag Link Fri Aug 3, 2007
It depends on how much money is at stake. You executed a lease option agreement and under the terms of the contract, you chose not to exercise your option. Since it is small claims, i assume you have no attorney. You should speak with an attorney to determine if you have a claim against the other party. Without one, i doubt that you will recover anything
0 votes Thank Flag Link Fri Aug 3, 2007
Hi Sheri,

Your best bet is to consult with an attorney on this subject, as this is a legal matter. I do agree with Robert. If the attorney advises you that the legal costs will be higher than what your deposit is, it would only make sense to dismiss it. Best of luck to you!

Melissa Mancini, Realtor, CBR, GRI
Web Reference: http://MelissaBMancini.com
0 votes Thank Flag Link Fri Aug 3, 2007
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