"I Have An Equitable Interest
In The Property"...
Tenant/buyers who default on a lease/option do not always go away quietly. Sometimes, they fight the eviction and go into court kicking and screaming,
"I Have An Equitable Interest In The Property." What they are arguing is that the lease/option is not a landlord/tenant relationship, but rather a seller/buyer relationship. If the Judge agrees, your lease/option is "re-characterized" as an installment land contract. This may require you to foreclose the tenant, not just evict him.
Here Are Some Tips For Avoiding The Equitable Mortgage:
Use Separate Agreements: Give your tenant a lease and a separate option agreement.
Make certain the lease does not refer to the option. More than 75% of the time, the tenant loses his paperwork.