Not fair market rent value

[wyckd]

We are working with an property owner that owns a property in Arizona who has his property for sale. We are private real estate investors that purchase homes using lease purchase, which means we lease or rent the house for 2 years and buy the house at the end of the lease term. The rents that we pay every month will be applied towards the purchase of the home. So we both signed a contract agreeing to that and provided him a $40,000 down payment on the home. Verbally we expressed that rents that we pay the owner will be market rents, meaning we will pay an amount that was comparable to what other homes in the area where renting for. The owner requested that we put $3,000 and we assumed that we was providing us a fair amount, but he really had no basis for but his own self-interest. We ended up signing the contract before we did an inspection of the home and our due diligence to evaluate the property and that should have been done before the contract was signed so we truly knew what we were getting ourselves into. So, we got locked into $3,000 in rents, but the real estate agent that we hired discovered that we could not get more then $2,100 in rents for that property. So, that means we would be losing $900 a month. We asked the owner to be fair and reconsider this amount. We were even open to just going a little bit down to like $2,500 and still losing money, but less than before. But, the owner refuses to budge and work with us. As mentioned before, he has a $40,000 down payment from us.What legal actions can we do for this matter?

 

[army judge]

Your legal actions are clear, honor the lease you signed, or default and lose the $40,000 down payment, plus get sued for breaching the lease.

You signed the agreement.
You failed to perform proper due diligence, and you're getting rocked for it.
If you breach, he'll probably sue you in small claims and you'll get rocked again.

 

[disagreeable]

I suggest you undertake another line of employment if you cannot handle due diligence in this profession.

 

[wyckd]

Thank you for the reply @army judge.Is it possible that we can reform the lease? and there's no basis that we can sue the owner?

 

[wyckd]

Thank you for the reply @army judge.Is it possible that we can reform the lease? and there's no basis that we can sue the owner?

 

[army judge]

Thank you for the reply @army judge.Is it possible that we can reform the lease? and there's no basis that we can sue the owner?

If I were the other party, I'd never agree to any changes.
The law won't help you, either.
But, you're free to take the issue to court.
Courts don't look at if you made a good bargain, or a bad bargain, only of it was a legal bargain.

 

[Gail_in_Georgia]

"there's no basis that we can sue the owner?"

Sue the owner for what? Do you have a legal argument that you were, somehow, coerced into signing this agreement?

Gail