Beware Deals That Sound Too Good To Be True
By Tyler Brannon
Ms. Adair (not her real name) had not planned on buying a home. She had never spoken to a bank about getting a loan. She didn’t even have a checking account. She assumed that her retail job and poor credit history doomed her hopes of home ownership. Then she found a mobile home that seemed perfect.
This was a home that she could move into immediately. She would not have to secure a loan and the seller did not care about her poor credit history. The seller was not even asking her to make a down payment. All Ms. Adair had to do was to pay a low monthly rent for thirty months with two extra payments when she received her income tax refund. The seller explained that the generous terms were possible because this would not be a standard sale. This home would be “rent to own”.
Unfortunately, the seller was not telling the whole story: in fact she knew from prior efforts to sell this home exactly what to leave out to make this deal sound a lot better. The seller would not disclose that the $11, 250.00 total payment amount was more than double the estimated fair market value of the home. She did not emphasize that the contract gave her the power to evict Ms. Adair from the home if she ever made three late payments over the course of thirty months. Most importantly, the seller did not mention that she never really intended to sell the mobile home to Ms. Adair.
The seller ultimately waited mere hours to deliver a notice to vacate to Ms. Adair after she made her third late payment. (By the way, when Mrs. Adair made these late payments, she paid late fees every time: in no instance did the seller fail to get the money owed her, and more because of the fees.) The seller demanded that Ms. Adair vacate the mobile home in seven days. The seller would keep all the money Ms. Adair had put into the house. She refused Ms. Adair’s attempts to negotiate a way for her to stay in the home.
Faced with an eviction from her home, Ms. Adair turned to Legal Services Alabama’s (LSA) Huntsville Office for assistance. At trial the seller failed to establish that Ms. Adair’s late payments even violated the terms of the rent to own agreement. And if such an agreement is not actually violated, the seller’s remedy is not the eviction that was being attempted here, but the very different process of ejectment. Ejectments must also be filed in Circuit Court and not the lower state district court, where this case was being heard. LSA made a motion to dismiss, and the court dismissed the seller’s lawsuit from the bench.
The story was not over. Ms. Adair had no intention of staying in an overpriced home, owned by someone who had had tried to wrongfully evict her. In negotiations after trial, instead of just taking back possession of the home, the seller demanded $900.00 in compensation and threatened to file another suit, a blatant attempt to punish Ms. Adair for asserting her rights under the law. With LSA there to stand up for our client, the seller dropped her threats. By the way, a few days later, the seller admitted why she was so pressed to get the $900: she was selling the mobile home again!
Tyler Brannon is based in our Florence satellite office.