Home Selling in Hawaii>Question Details

Jean Connolly, Other/Just Looking in

is it legal to do a double escrow on a lease/option?

Asked by Jean Connolly, Fri May 9, 2008

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4
You are best to refer to Frank's email below.

Since everyone's situation is unique to themselves, including your own, you would be best advised to sit down with a real estate attorney. I would encourage you to buy an hour of the attorney's time so you can make a sound decision. When you talk to the attorney, ask about importance of disclosure of a double escrow.

Kind Regards,
Andrew Meislin
President

Lauhala Mortgage
74-5620 Palani Court; Suite 208
Kailua Kona, HI 96740

Phone: (808) 331-0585
Fax: (808) 331-0583
Email: Andrew@LauhalaMortgage.com
Web-Site: http://www.LauhalaMortgage.com
0 votes Thank Flag Link Wed Dec 9, 2009
Check with a title company to see if it'll do it. I don't know about Hawaii, but in many other areas of the country, while it's legal, many title companies refuse to do it.

There are lots of other ways to accomplish the same thing. The most obvious is to assign the option. Generally--I'm not a lawyer, so this isn't legal advice--if an option is silent as to its assignability, it is assignable. So, if you have Owner A, Option Holder B, and Ultimate Buyer C, Option Holder B doesn't have to do a simultaneous closing with Owner A, then with Ultimate Buyer C. Instead, Option Holder B assigns the option (for whatever fee is agreed to by B and C) to Ultimate Buyer C. Then Ultimate Buyer C closes the transaction with Owner A.

That's the cleanest, simplest way to do it.

You can also use a land trust or an LLC. Option Holder B sets up a land trust. B excercises the option with A, then sells his beneficial interest in the land trust to C. Or, with an LLC, same process. B sets up an LLC. B closes with A, then sells the LLC to C. In either of these scenarios, at some point in the future, C brings the property out of the land trust or LLC and refinances, putting the mortgage into his own name.

Again, that's not legal advice, just scenarios to run past lawyers familiar with real estate investing and (if you use that one strategy) land trusts.

Hope that helps.
0 votes Thank Flag Link Tue May 20, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Entirely Legal. However it is not legal to solicit a Buyer for the re-sale while in escrow with the Seller.
You cannot attempt to sell what you do not own.
0 votes Thank Flag Link Tue May 20, 2008
That is absolutely an attorney question. Email me if you need a few names in Hawaii.
0 votes Thank Flag Link Sat May 10, 2008
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