Re: Sale lease back in Arizona

You have mis-stated CA law. There is no CA law preventing a buyer renting back to a Seller on a Owner Occ 1-4 unit residential property.

There are, however, specific laws in CC1695 that can turn any promise to a Seller to re-purchase their former property into lawsuit. It's more messy from there on, too.

The transaction which would potentially allow the former owner to re-purchase may be considered a financing devise and treasted as a mortgage (not trust deeds) just as states using that methods of securing real estate loans. Hence, they have to be foreclosed on judicially (i.e. court order, sheriff sale, etc.) Also, big issues as to treatment of costs, expenses, disclosures, rescission periods, etc. Not pretty.

There are other really impractical reasons why permitting a former owner to remain in their former property is inadvisable: Former owners often forget the "former" owner aspect, forget that someone 'helped' them, cry foul, lie in court, plead ignorance, and make it tough to get them out when they (again) fail to pay the monthly rent/mortgage/whatever-you-now-call-it. Their attachments to the benefits of homeownership remains long after their paying habits have departed.

As to AZ's law, aim for getting them out up front rather than trying to be clever and punch holes in the law.

BTW, we'll still be here when you post how you went ahead and did it your way and now have a mess. But we reserve the right to tell you: "Told you so." Hope it works out regardless of which way you go.