rental-property
Tenant Wants Years of Rent Reimbursed Before Buying House
<p>We bought a house for my daughter and grandchildren in 2009.  In 2013, my daughter's boyfriend moved in with our permission.  We have no written rent agreement.  In 2016, we opened dialogue for the boyfriend to buy the house.  In calculating the sales price, the boyfriend deducted three years' rent. No written offer and acceptance happened.  The boyfriend contends since there was a shaking of hands after the dialogue was concluded, he considered that our acceptance of the figures he came up with.     Now, in 2019, we are again discussing the boyfriend buying the house.  He insists we had an offer-and-acceptance agreement back in 2016, and he therefore made improvements in the house he thought was going to be his.  When we disputed his perception of what happened in 2016, he now is presenting us with more than $10,000 worth of expenses he's incurred when making the improvements.  We value the house at $225,000.  He's willing to buy the house for $150,000 then deducting $50,000 of rent.  After normal costs are deducted, our net profit will be $32,000, according to his calculations.   Does he have a leg to stand on in his calculations?  Does he get to have years of rent reimbursed to him?  Again, he is an at-will tenant.</p>

<p>He gets exactly what you give him. If you think the home is worth $225,000 then you should offer him to buy the house for $225,000, and that's it. There is no reason why would accept a lower purchase price of $150,000, there is absolutely no reason to deduct $50,000 rent from the purchase price, because that $50,000 is rent for living there, and there is no reason for anyone other than him to pay the $10,000 for changes that he wanted. </p>

<p>Alternatively, you can put the house on the market for $225,000, and if it is sold, your daughter and boyfriend can find somewhere else to live. </p>

<p>On further thought, and reading the comment: This boyfriend seems to be quite the sleaze bag. So if you gave in to his demand, and sold him the house for less than half what it's worth, you shouldn't be surprised if <em>he</em> sold it for $225,000, moved away with his new girlfriend who is not your daughter, and left your daughter homeless. </p>

<p>In most jurisdictions contracts for sale/purchase of real property are not binding unless they are in writing. California is no exception (<a href="https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&amp;sectionNum=1624." rel="nofollow noreferrer">Cal. Civ. Code. 1624</a>):</p>

<blockquote>
  <p>(a) The following contracts are invalid, unless they, or some note or
  memorandum thereof, are in writing and subscribed by the party to be
  charged or by the party’s agent:</p>
  
  <p>(3) An agreement for the leasing for a longer period than one year, or
  for the sale of real property, or of an interest therein; such an
  agreement, if made by an agent of the party sought to be charged, is
  invalid, unless the authority of the agent is in writing, subscribed
  by the party sought to be charged.</p>
</blockquote>

<p>Therefore, legally speaking, it is irrelevant whether there was offer/acceptance in this case. It is a proposed <em>property sale</em>, hence no written contract means no contract at all.</p>

<p>The fact that the boyfriend paid rent and made improvements gives him no legal entitlement to the property whatsoever. The most this fact could do for him is to play some part in your mind when making it up about the asking price and considering his offers.</p>

<p>That said, on the face of it he genuinely believed that the house will be his for a price within certain range, and so he put his money and effort into improving it. He was perhaps hoping that you would give him a discount because of that and also because he is kind of a member of your family. Now he is trying to present that as his legal entitlement, either in mistaken belief that it is true, or in attempt to persuade you that it is true while knowing it is not. Either way, it is totally up to you how to judge this and whether to give any discount. Again, legally, he is not entitled to any, though morally he might be.</p>

<blockquote>
  <p>since there was a shaking of hands after the dialogue was concluded,
  he considered that our acceptance of the figures he came up with</p>
</blockquote>

<p>People shake hands out of <em>cordiality</em> regardless of whether or not their negotiations culminate in an agreement. Shaking hands is more a sign of <em>civilized conduct</em> than of the formation of a contract. Thus, the boyfriend's allegation sounds unavailing.</p>

<blockquote>
  <p>Does he get to have years of rent reimbursed to him?</p>
</blockquote>

<p>I am not knowledgeable of CA law, but that seems very unlikely. Transfer of real estate is significant enough to warrant rent-to-own agreements to be clearly established beforehand so as to pre-empt confusions as to the parties' alleged understanding, the development of housing market, and so forth.</p>

<p>Not only there is no evidence that you two entered a rent-to-own (verbal) agreement. But also any favorable treatment of his tenancy tends to weaken the boyfriend's presumption that his rent payments shall be construed as amortization of equity. For instance, if his rent is lower than what you would have charged a generic tenant, then it seems unlikelier that --on top of that-- you would willfully consider his reduced rent payments an advancement of the purchase.</p>

<p>Likewise, the parties' subsequent conduct helps discerning each one's understanding from the dialogue in year 2016. First and foremost, the fact that he did not remind you of (or did not revisit) the matter for the next three years suggests that (1) he himself did not consider the 2016 conversation a cognizable contract and/or (2) the alleged contract is voided because its non-performance has exceeded a reasonable time.</p>

<blockquote>
  <p>Does he have a leg to stand on in his calculations?</p>
</blockquote>

<p>It is unclear how he (or you) came up with those numbers that would translate to your profit of $32,000.</p>
