“The landlord might decide to sell the house based on the value today, not the value two years ago when you signed the contract.”
In different phrases, be sure to come to an settlement on the worth of the home and that the agreed-upon worth is said within the contract.
5. Sustaining the property
Earlier than you signal a rent-to-own contract, be sure that phrases round property upkeep are clearly outlined.
“Every landlord does things differently,” says Monzo. You’ll wish to just remember to and the owner agree on who shall be chargeable for fixing one thing if it breaks, who will keep the garden, and who will sustain on the routine upkeep of the house, like having the methods in the home serviced.
And, as all the time, be sure that these aren’t simply verbal agreements — they must be outlined within the contract.
6. Extra bills
Proudly owning a house comes with many charges, a few of which may be a shock to you if you’re renting-to-own. Ask the owner if there are further bills, like a householders affiliation (HOA) or highway upkeep charges — and if there are further charges, be certain that your contract outlines who’s chargeable for paying them.
Likewise, just remember to and your landlord are clear on who shall be chargeable for paying the property taxes and householders insurance coverage on the house through the rent-to-own interval.
7. Different circumstances
Except for the generally included phrases in a rent-to-own settlement, the owner could add another circumstances particular to your scenario. Be sure to go over your rent-to-own settlement with a fine-toothed comb and contemplate using a lawyer or actual property agent earlier than you signal on the dotted line. With out consultants who’re educated to maintain your finest curiosity in thoughts, you would possibly end up beholden to stipulations and circumstances that have an effect on the phrases of your contract.
“Renting-to-own gives you no more vested interest in the ownership of the home than a traditional lease will,” Monzo says. “Basic eviction laws still apply.”
Consider, too, that if the choice to purchase shouldn’t be exercised on the finish of your rent-to-own contract, you’ll possible lose the choice charge you paid and the hire premium.
8. Renewal phrases
It’s extremely necessary that your rent-to-own phrases lay out the specifics round renewing your contract in case you aren’t able to buy the property when the contract is up. What occurs, for instance, in case you nonetheless wish to buy the house however want a couple of extra years to save lots of? Should you don’t have a renewal choice within the contract, you may lose all the cash you’ve already put towards the house.
9. Different rental settlement particulars
Monzo factors out that each landlord attracts up the contract differently — a few of these are authorized and others usually are not. “One landlord may have a lawyer draw up a contract; another goes on Google and finds a contract; another decides to type it up themselves,” says Monzo.
Consequently, some further rental settlement particulars are authorized, however some usually are not. For instance, “a landlord may say that having a pet is a cause of eviction, but state law does not enforce that,” Monzo says. “Landlords interpret the law in their own way; they are not lawyers. A lot of them put things in a contract that are not even legal.”
Monzo recommends ensuring that your landlord makes use of an actual property agent with board approved-forms as a result of they take out any hidden clauses and language that’s laborious to decipher. “You’ll know 100% that the information in those forms is legal,” he says.
Different choices
Monzo says that whereas signing a rent-to-own contract would possibly sound interesting, it’s not the everyday approach a house owner goes about buying a house. By his estimate, rent-to-own contracts add as much as about 5% of the leases he offers with.
“There are some landlords that only do rent-to-own. That is their business model, and that’s okay,” says Monzo. “But when you are dealing with an agent, our job is to look out for our clients and protect them.”
Header Picture Supply: (Jacques Bopp / Unsplash)
