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Rent to own is a type of purchase option in a real estate scenario wherein an individual can buy a property without having the ownership rights on it. Usually, in this type of an arrangement, the purchaser negotiates on the future price of the property and reaches a settlement with the seller before renting the property. Once that is done, the buyer starts renting the property and offers a rental amount higher than the market rent to the seller. A section of this amount goes into a down payment on the property, which the buyer is allowed to purchase later. Below are answers to few of the more common legal questions about this type of a rental contract: If someone has a poor credit record, then is it regarded as an intelligent move to purchase a house using a rental purchase agreement?
In this case, you would be better off exploring two other options of purchasing a house rather than getting involved into the agreement through which you can rent a property to own it. The first one would be renting a house and pay the rent as per the market value to the landlord. However, in this arrangement, apart from renting the house you would also have another option of purchasing it afterwards. In this purchase option, you would have certain amount of time within which you will have to buy the property. But in case, you choose not to buy the house, then the amount that you have given for down payment from the rent would not be lost. The second option would refer to approaching a seller and purchase a house or property directly from him. There would be a property owner who would secure the financing and if you are unable to pay off the money, then the property would be taken back from you in order to recoup the financial loss. However, as long as you do not default, you would have all the rights to enjoy the property. If I signed an agreement related to renting and owning a property, then in that case is it legally permissible for me to sell a property to clear off all the dues I owe the original owner? Or can I give this property to another person based on this agreement?
Since you are an inhabitant of a property, who is only allowed to rent the property in order to own it later, you do not have any legal rights that define your ownership on that property. Therefore, in a situation like this, you are not allowed to sell that property to any individual. However, based on the terms and conditions of your agreement, you could offer your contract to some other person or rent out the property to someone else. But, it has to be completely dependent on what the contract allows you to do. I am the landlord of a property. The tenant of my property has a contract that allows him to rent the property in order to own it. In such a situation, am I legally allowed to enjoy the ownership rights on my property until my tenant has cleared all the payments? Moreover, can I make him vacate my apartment if he fails to pay the rent on time?
In a case like this, you would need to go through the rental agreementthat you have signed with your tenant to know who is the real owner of this property and who is allowed to get the security interests from it. It is basically the terms and conditions of your lease agreement that should allow you to quicken the loan process if your tenant seems to go in default and reoccupy the property if the accelerated amount of money is not paid by the due date. These types of agreements have both advantages and disadvantages. However, it is very essential for a buyer or a property owner to be fully aware of how the contract works, if as an owner you want to rent your property to a buyer and as a buyer, you are interested in obtaining the property using this process. If you need any clarification about your particular situation on the subject, you may wish to ask a real estate lawyer for legal insight based on an expert evaluation of your circumstances.
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