Rent to own agreement with Family

[TeddyBarrett]

Recently my Mother-in-law offered her house to my wife and I. she felt it was to big for her, she didn't like the idea of rooming with other people, and she wishes to keep it in the Family. The house itself is paid off, she wants us to pay her a small rent of $500 and take care of all the utilities and taxes and that she will go get an apartment. And eventually that we will own the house, as she put it, "rent to own."

We are meeting soon to go over the logistics of this arrangement.

And my question is; is there someway to work out a contract that would prevent her mother from being able to change her mind like 4 years in and kick us out on a dimes notice? Or that would stop her from controlling changes to the house? And that there would be a set goal to reach for owning the house?

(I hope I posted this question in the right forum, first time poster here) (st: Texas)

 

[henbob6]

What is the name of your state (only U.S. law)?

Please use the edit feature to add your question to your original post, or use the reply feature to add it to the thread. Don't forget to add your state!

 

[TeddyBarrett]

Please use the edit feature to add your question to your original post, or use the reply feature to add it to the thread. Don't forget to add your state!

Fixed it, thanks

 

[Zigner]

Recently my Mother-in-law offered her house to my wife and I. she felt it was to big for her, she didn't like the idea of rooming with other people, and she wishes to keep it in the Family. The house itself is paid off, she wants us to pay her a small rent of $500 and take care of all the utilities and taxes and that she will go get an apartment. And eventually that we will own the house, as she put it, "rent to own."

We are meeting next Wednesday(28th) and going over the logistics of this arrangement.

And my question is; is there someway to work out a contract that would prevent her mother from being able to change her mind like 4 years in and kick us out on a dimes notice? Or that would stop her from controlling changes to the house? And that there would be a set goal to reach for owning the house?

(I hope I posted this question in the right forum, first time poster here) (st: Texas)

The BEST way is for you to buy the house from her (you know...with a mortgage and all). No matter what you decide, the best thing to do is to consult with an attorney about the matter to make sure everybody's interests are protected.

 

[HRZ]

You raise good questions....rent to own deals are full of potential problems and state specific issues ....I think it is imperative as buyer that you have seasoned real estate attorney representing you as buyers go over the draft format of your deal BEFORE its in final form and signed ...you want it safe !

 

[TeddyBarrett]

You raise good questions....rent to own deals are full of potential problems and state specific issues ....I think it is imperative as buyer that you have seasoned real estate attorney representing you as buyers go over the draft format of your deal BEFORE its in final form and signed ...you want it safe !

Yeah, so far it sounds like her mother wants to go about this informally, and I am not comfortable with that.

What would the best way to get the ball rolling with an attorney? I am very new to all of this

 

[Ohiogal]

Yeah, so far it sounds like her mother wants to go about this informally, and I am not comfortable with that.

What would the best way to get the ball rolling with an attorney? I am very new to all of this

You cannot go about this informally. The Statute of Frauds REQUIRES a written contract. Nothing informal about it. Get counsel.

 

[TeddyBarrett]

You cannot go about this informally. The Statute of Frauds REQUIRES a written contract. Nothing informal about it. Get counsel.

Yeah, all of this is making sense, I like the idea of buying it from her, would she be able set the price so we would end up paying the $500 she mentioned?

 

[LdiJ]

Yeah, all of this is making sense, I like the idea of buying it from her, would she be able set the price so we would end up paying the $500 she mentioned?

She could if she wished to sell it to you that low. You cannot be certain that she would be willing to do that, particularly if she has other children. It could be that she was hoping that by letting you live there for next to nothing for a few years, that it would put you in the position to get a mortgage for the remaining fair market value.

 

[latigo]

Yeah, so far it sounds like her mother wants to go about this informally, and I am not comfortable with that. What would the best way to get the ball rolling with an attorney? I am very new to all of this

Well you should not be comfortable with that!

In the first place a promise or agreement to sell real property is not enforceable "unless the promise or agreement is in writing and signed by the person to be charged or by their lawful representative". ( See: Texas Business and Commercial Code - Chapter 26 Statutes of Fraud - Section 26.01 (b)(4)

Secondly, even if the statute of frauds is satisfied it would be foolhardy of you to agree to the loose terms she is proposing. By that I mean agreeing to purchase the home with title to remain invested in her name and no assurance that you would ever acquire marketable title.

How do you "get the ball rolling with an attorney"? Try calling one.

 

[TeddyBarrett]

Well you should not be comfortable with that!

In the first place a promise or agreement to sell real property is not enforceable "unless the promise or agreement is in writing and signed by the person to be charged or by their lawful representative". ( See: Texas Business and Commercial Code - Chapter 26 Statutes of Fraud - Section 26.01 (b)(4)

Secondly, even if the statute of frauds is satisfied it would be foolhardy of you to agree to the loose terms she is proposing. By that I mean agreeing to purchase the home with title to remain invested in her name and no assurance that you would ever acquire marketable title.

How do you "get the ball rolling with an attorney"? Try calling one.

Well, I feel you just summarized what other people have brought up, but in a much more intense and condescending way. Which I don't see as helpful.

 

[TeddyBarrett]

She could if she wished to sell it to you that low. You cannot be certain that she would be willing to do that, particularly if she has other children. It could be that she was hoping that by letting you live there for next to nothing for a few years, that it would put you in the position to get a mortgage for the remaining fair market value.

You raise a few good points.

She is wanting to give us an opportunity for a house that is In a great area to start a family, and she wants the home to stay in the Family, and for it to be cheaper on us. Which is a huge blessing. She is an amazing woman, with very good intentions. However, I want our interests to be protected if we were to go through with this. So this forum has been a great help.

 

[PayrollHRGuy]

Are all of her heirs also great people? What if, God forbid, she gets hit by a truck right after you have spent some money on the house?

 

[TeddyBarrett]

Are all of her heirs also great people? What if, God forbid, she gets hit by a truck right after you have spent some money on the house?

Exactly why I started this form to see what my options were because I did not want to be informal about this.

 

[HRZ]

Nothing prevents you, OP, from getting a copy of the deed and working out a rough draft of a contact for deed with competent Counsel that safely meets your needs and ability to pay...and the draft has lots of open space to make changes...and you use this as a format for discussions with parents ....mark it up to suit everybody...but take it back to your attorney for final tune up before all the parties sign it .