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The Downside to Both Sides in Lease-Option

July 10, 1994

I have been a private investor in residential real estate for the past 15 years and have been a reader of Robert J. Bruss' column ("Real Estate Q&A") in The Times for several years. I feel compelled to voice my strong disagreement with his view on lease-option agreements.

I know Bruss is very much in favor of lease options. But what he doesn't tell the readers is that before a tenant enters into a lease-option agreement, they must be able to identify the source of the money for the down payment once the lease/option agreement expires.

I have had two lease options. Both times the tenant was not able to exercise the option and lost a lot of money. Sure, I made a few dollars, but was very disappointed when the tenant could not buy the property and I lost out on an easy sale. Instead, I received the property back and was faced with the unpleasant task of going through the repair, advertising, showing and screening of deadbeats.

Now whenever a prospective tenant inquires about a lease-option, I inform them that if they are planning on winning the lottery to finance the purchase, that they had better forget about a lease-option. I explain to them that a lease-option can result in their losing a lot of money and wishful dreams. I suggest that Bruss do likewise.

NORMAN J. HAUSSMANN

Placentia

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