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Mortgage Foreclosures
Lease/Options & the Equitable Interest
by Attorney William Bronchick
I get a lot of emails and calls from people concerned about selling a property by lease with option because of the fear of the "equitable interest". What does this mean and how big of a danger is it?
Before we discuss the equitable interest, we need to discuss the basic owner-financed sale. When you sell a property, you give the buyer a deed to transfer ownership. If you owned the property free and clear before you sold it, you would take back a note for part of the purchase price, secured by a lien on the property (in some states a "mortgage", in others a "deed of trust"). So, after the closing the buyer would have title (deed) and you would have a recorded lien against the property ("mortgage" or "...
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