Question:
Our HOA states that a Contract with intent to buy must still be treated as a rental “until it is actually sold,” due to the risk of default on the Contract. To me, it sounds like an excuse not to put a homeowner’s property on the rental list. Any advice?
Answer:
I am in agreement with your homeowners association. An executory contract of sale does not affect title to the unit. In the event that the tenant currently occupying the unit enters into a contract of sale with the owner to purchase the unit, the tenant continues to occupy the unit as a tenant pursuant to the lease with the owner until closing of title. It is only at closing, when the owner executes and delivers to tenant a deed for the unit, that the tenant’s interest as tenant under the lease is extinguished and the lease is terminated.