Rent to Own House

Rent to own house is a proposition that comes good in the financial sense. People may not have saved considerable sum of money to make down payment for buying a house or their credit record may be blemished. 

With rent to own, the renter is required to pay an agreed upon amount as rent per month to live in the house. The end of the contractual period (customarily three years) sees the renter taking possession of the house. This is pulled off by commingling a portion of the down payment with the rent amount each month. 

The process of drawing up the contract should see careful contemplation about the sale price of the house and the rent to be charged, as the amount decided will be locked in for the rest of the term. Any deviation in property value within the contract period will be excluded from consideration. 

The renter has to pay an option fee which is seller’s income if the contemplated purchase fails in future or will become part of the down payment at contract’s end. The rent premium paid by renter is typically the income for seller and is slightly above the stipulated rent.

Free Rent to Own Agreement Contract

Free rent to own agreement contract can be downloaded at one’s convenience from legal sites that post them online. Such contract will have all the relevant points of the agreement clearly drawn out to facilitate easy understanding of the nature of agreement one is going to enter.

Prominently, consensus should be build upon the option fee and rent credit. Option fee is the amount of money the renter is required to shell out over and above the decided rent to claim ownership of the property after the contract expires, which usually is 1 to 3 years. The option consideration usually is 1 to 5% of the agreed upon purchase price of the property. 

Rent credit is the credit made available to the buyer who plays a fair game with the owner. This essentially is important as the rent for property usually is higher than the existing market rates. The option fee is forfeited if the contemplated purchase does not take place. The renter and owner should go through and sign the agreement only after unanimity on all terms of the agreement has been reached.

What Does Rent to Own Mean

One essentially stumbles upon this question “what does rent to own mean” when looking out to buy or lease property. Rent to own is a glorious option for people who do not have a good credit record or who have not sufficient fund to make down payment to buy house or other appliances.

One can rent a property at an option consideration wherein apart from paying rent to use the property; an extra equivalent to 1 to 5% of the property value is paid per month to claim possession of the property at the end of the contract. If the contemplated takeover does not see itself to fruition, the renter stands to lose the entire money.

The renter can claim a rent credit by playing good with the owner. The rent to own contract generally spans from 1 to 3 years. The owner may take possession of the property if the rent is delayed and can claim a penalty if damage to property happens.

What is Sublease

Sublease essentially implies renting the property from a lessee and then renting it out to a subtenant. The principal tenant who has entered into the rental agreement with the owner remains accountable to him for observance of all the terms and conditions pertaining to the lease. 

In the event of subtenant defaulting on the rent front or causing damage to the property, the principal tenant remains liable to own it up and to pay the penalties accrued. To stave off such incidents, the Principal tenant takes a security deposit from the subtenant and charges the rent directly from him. 

The Principal Tenant assumes the responsibility of the landlord for the subtenant and may terminate the agreement with him by tendering prior legal notice. The contract agreement to sublease customarily requires granting of explicit permission by original landlord to sublease and the validity is expressly indicated by the signature of the later on the contract.

What is Lease Law

Lease law governs the leasing out of residential or commercial property and is guided prominently by state statutory tenant codes and the common law on renting. The laws lay the ground on which the legal relationship between the renter and landlord is to be framed. 

The lease law attempts to clearly spell out the rights of the landlord and tenant by putting in place terms and clauses to be mutually agreed upon. 

The law expressly indicates the period and nature of contract under which the property interest of the owner is limited after lapse of certain period of time and the right to possession, subleasing the property and restricting entry is bestowed upon the renter. 

The duties of the owner and renter are spelt out in the law and deviation from the same is not legally desirable unless otherwise exempted. The contract agreement is penned keeping in perspective the provisions of the statutory lease law.

Option to purchase agreement

Option to purchase agreement is entered into by a person who does not qualify for conventional mortgage or financing due to poor credit rating. The tenant signs a contract with property owner wherein he indicates his consent to pay a rent to enjoy the property for a fixed period; at the termination of which the renter gets the exclusive right to take possession of it at a price that has been previously agreed upon.

The tenant is required to pay a non refundable option fee which goes towards the purchase price of property. The tenant then shells out an amount typically equivalent to the rental sum on monthly basis which is inclusive of the option consideration and the mortgage fee owed to the owner.

The renter stands to have his entire option fee forfeited if the desired purchase does not take place. In the event of inability to purchase the property at the expiry of contract, the owner can extend the rental period or convert the lease agreement into a conventional rental contract.

What is Lease Option

A lease option is the ability to rent a property with the option to purchase it. The owner and renter enters into an agreement whereby at the termination of the lease option, the renter is bestowed the right to take possession of the property. 

The option is considered by doling out a fee by the renter to the owner which customarily comes around 1 to 5% of the agreed upon purchase price. 

This option confers the right of purchasing the property at a later date to the renter. In the event of failing to exercise the option, the fee is not refunded to the renter. 

The property is appraised at a price con-sensually arrived at considering the cost valid at the time of exercising the option or conception of the contract. The typical length of lease option is 1 to 3 years. 

Everything functions similar to a lease except that a schedule is chalked out when the renter can contemplate to buy the property.