Lease Option Problem Cant Refi

[rbjr400m]

I have a lease option in las vegas nevada for 335k. Tried to refi the house appraisal came in at 281k. Cant get the house financed. Can I break my lease.
My Logic is that I cant refi because the house is not worth what is owed.

No, you can't break the lease or contract. The reason is not sufficient and is not due to anything the owner has done. The housing market is volatile. It goes up and down. You should have known this going into the deal. Now that the market is in a downturn, you're in the same situation as every other homeowner or buyer. Our houses are worth less now than what they were last year. You negotiated a price to buy the house without taking into account that the market may go down instead of up. You have only 2 choices: You can try to renegotiate the price for the house by explaining the downturn and what the house is currently appraised for, or you can break the contract and suffer the consequences (usually loss of down payment, rent until it is re-rented, advertising costs, etc.). Sorry.

I'm in a similar situation in MI. We don't think the seller will consider renegotiating the price for the house. I understand losing the initial down payment. But is there a reasonable about of time to get a house re-rented? The housing market is so bad right now that a a new tenant, or a sale of the home, might take several months to years.

We have 15 months left on our lease and are considering looking at other properties. Is it possible to break the lease and negotiate a MTM after 12 months?

TIA

MI law is silent on whether a LL must mitigate damages by trying to find a new tenant and re-rent the unit. Most states do require that a LL do this to lessen your damages. MI law fails to address this. You would have to check case law for that state to see where judges stand on this issue.

If they have not decided that LL's do have a duty to re-rent, you may be on the hook for the entire lease. If they have decided that the LL must mitigate, you are still responsible for rent until the house is re-rented, advertising, agent fees if he uses one to find a tenant, damages beyond wear & tear, and any other unreimbursed expense he suffers because you broke your lease. In a bad market, it would stand to reason that it will take longer to find a tenant. The LL would have to show that he tried hard to find one (advertised) to collect rent from you for that period.

Whether the LL would consider converting your lease to a month to month after the 1st year is up to both of you. You could attempt to negotiate this, but he doesn't have to accept it. Can't hurt to try.