What would the cost of asbestos removal be? It might be cheaper than what an attorney would cost you even if the buyer doesn't have a valid claim.

No. But, look at LOTOs statement.

This could go to court. He'll sue you for not remediating the asbestos. You'd counter sue for damage to your property (he's still renting, right?)

I think you actually have the stronger claim. Unless you agreed to the early sale.

(I'm not an attorney, btw).

The way I write up a LP, the buyer does all inspections at beginning of lease and all repairs are negotiated up front. A LP is pretty much just a purchase contract with a delayed closing. Every detail should be decided upon up front, not at the time when the lease term is up. Of course, there are a lot of ways a LP can be written up... what does your's say? That will tell you what can and can not be expected.

LP states house sold as is, in current condition at time of lease signing. Buyer counters that it is illegal to sell with asbestos, no matter what contract says. My feeling is to offer to rescind contract. Buyer has already put money into the home - he's already paid for future installation of cabinets in full - and I know the cabinet maker - Buyer will back down. (I hope.)

Wow. I'm not an expert, but this is my understanding:
As far as I know, and it might depend on what state this is in, it is NOT illegal to sell with asbestos at all, and asbestos is NOT a problem unless it has been tampered with.
So was the linoleum tampered with? As in, the asbestos has been exposed (and is now "dangerous")? Perhaps carpet staple holes? If so, you're going to have to remediate, and perhaps you can get the buyer to go 50/50 since he's the one who exposed it (damage to property) in the first place.
If the bank inspection is just saying, "note: asbestos in flooring" then it shouldn't be a problem for you, only for him if he's planning to remove it in the future.

Selling with asbestos is not illegal in my state. I am not sure how it could even be made illegal in any state. SOOO many things have asbestos from a certain time period.

Now, if you sold and didn't inform the buyer the house may have asbestos, that may be illegal, depending on the state. In my state, there is a lead paint notification to buyers (standard, doesn't actually say if that particular house has lead paint, just a notification that houses built before xxxx date may have lead paint; and I think a similar asbestos notification).

Did you use a REA or REattorney when you drew up your papers?

' Buyer counters that it is illegal to sell with asbestos, no matter what contract says."

In what state?

I have never heard of ANY state having such a law.

C9... I think you are mistaken when you say if the asbestos has been exposed that the owner has to repair. As far as i know a seller can sell a property in any condition they want, as long as the buyer is informed and agrees upon it. It only needs to be disclosed. Maybe not even that. And a well written LP should never allow the RENTER to upgrade, alter, paint, or add onto YOUR property. (unless you provide written permission as to what exactly is being done) Most people fail to realize that the future buyer is a RENTER until the purchase part of the contract is fulfilled. Renters are not allowed to put in new cabinets, or to destroy the floor, just because at some point in the future, they may purchase the place. Sounds like you may have a poorly written LP. Who prepared it for you?

Thanks for all the comments/advice. I have decided to see how this blows over and worry no more. You have given me confidence that he is just trying to bowl me over...and doesn't really have a valid threat. I just hope he gets his mortgage early and I can close this chapter. Thanks again.

It would help other people in your situation to keep us updated on the outcome. And remember, the future buyer needs to be reminded that they are renting the property from you, until they close on the property. Act like a landlord and treat them like a renter.

"Sounds like you may have a poorly written LP. Who prepared it for you?"

Bingo.

These should generally be separate forms (a rental contract and a separate option to buy contract) and REALLY need to be drawn by a local RE attorney.

LP states house sold as is, in current condition at time of lease signing. Buyer counters that it is illegal to sell with asbestos, no matter what contract says.

It is illegal to KNOWINGLY CONCEAL that a house has asbestos contamination problems ... so many people just don't test for it.

He would have to prove that you knew about it before the sale. And that's hard to do.

And this is why lease to purchase is a bad idea.

Here in Charlotte, I only know of one attorneyhere in Charlotte that will even handle a LP deal... so much can go wrong and usually does. Our NC RE Commission does not even provide a standard form for a LP. I do know of one attorney that specializes in LP and Contracts For Deed type purchases.Most agents hate being involved in LPs because they do not understand them and the fact that we do not get paid until the deal closes, which they usually do not.
If GardenWeb would ever allow us to post pics and files directly to the site, I would upload the contract. If anyone wants to see it, just contact me via a private message.

The need to be (at least) state specific (and some cities have their own body of RE law on top of state laws and federal laws).

NCrealestateguy- I agree, that yes, someone CAN sell with an asbestos problem, but it is a BIG problem now, and would have to be disclosed to a different buyer if this one falls through.
So in attempt to salvage this sale and/or be ready for another buyer, the asbsestos would either have to be remediated or price concession made for it. It is unlikely that any buyer would take it "as is" at full price anymore.

"would have to be disclosed to a different buyer if this one falls through. "

Only if you have actual lab test results in hand.

Hearsay means nothing.

Plus, they damaged your property. If it "falls through" they owe you some $$$ for getting your house back to the way it was when their rental contract began, with normal wear and tear only during the months they were there...