Lease Option - Do I Have Equitable Interest?

Utah... I entered into a one year Lease Option contract in Sept, 2007 in Utah. The Seller told me she would extend it but now wants me out. She is wanting to retain the entire $18,000 down payment and for me to pay Aug rent which I told her to take out of the down payment. The middle of July she told me to be out by the end of July and I told her that I couldn't be out that fast. Now that I have looked up my rights, I am finding that it may be illegal for her to retain the entire down payment even though it states in the contract that it may be non-refundable. I think that I have an equitable interest and the terms of the lease option state many terms that are like a contract for deed. I have performed all the repairs on the property and have been in for almost 2 years. The original down was $13,600 and $200 per month for 22 months adds up to a total of $18,000. I wonder if I should take her to small claims court and at least get back $10,000 that is the max for small claims in UT. She has not filed any eviction with the court yet. She says that she is moving in to our house in 2 days from now. I will block her from doing that without court ordered eviction. I have just found another place to live, but I don't want to give in to someone who is being harassing and let her get away with an illegal act of retaining such a large amount. Can I even file a fraud case against her stating that she set me up to take so much money away from me? I need to know what is the best course of action.

What did you think the original deal was when you signed the one year contract? What was your intention?

I intended on closing within the 1 year but I have not been able to do qualify because of job and other related financial issues. I have been improving my credit but I still don't qualify. The Seller got the police involved and they are telling me that they consider me an owner because of the large amount of down payment that the seller has elected to keep. I am told that it is illegal for the seller in a lease option to retain more than 3 times the rent amount. So legally she owes me back $13,800. I guess I will have to fight this out in court unless there is some other way to transfer title to me or get her to refund most of the deposit back.

I also met all the conditions that were in the contract for an automatic extension for another year.
WYoung

In case you ever do another lease/option, your first mistake was agreeing to put up $13K in option money. That money is non-refundable and the only way you get to put it to work for you is if you exercise the option. Then it applies to the purchase of the home. It is not down payment money as you have stated. It is consideration for the the agreement... "good faith" money. Most option fees in my area are $2K to $5K, depending on the home of course. You don't own the home. The legal owner is whomever holds the deed. Equitable interest is for a judge to decide. Your lease was for a year. It is up and the owner wants you out. Even if you are a holdover tenant, if the owner does not accept a rent payment during the holdover period, you still need to go. If you do not have a lease or month-to-month agreement in writing, it does not matter what the owner verbally told you. You need to man up and get out.

The major problem here, however, is this is what you agreed to. Now you can't exercise the option and you want to weasel your way out of what you gave as your word. I'm guessing this is probably why your credit is already in bad shape. Do the right thing.