rent to own

[nancy]

I saw a classified for a townhouse describing it as a "Rent to own" and "LeasePurchase" with part of the rent going toward purchase. What legal rights would you have to the property in such an agreement? Would you actually have equity in the property prior to paying it off in full? I thought this type of home purchasing may be an option for me but I'm leary of the loopholes.

 

[msattorney]

As I understand rent to own arrangements, a portion of the rent you pay each month goes toward a down payment on the property. At the end of a set length of time, the rental agreement ends and a purchase can take place. Of course, you need to have a legal agreement about what will happen if you decide not to go through with the sale--or if the seller wants out. You need to have penalties set forth, the amount of payments that are refunded, how and where the payments will be deposited during the rental agreement, changes due to changes in property values or prevailing interest rates. Before entering this kind of agreement, it would be wise to have an attorney draft an agreement or at least review one before you sign.