Rent to own contract is easily understood as plan to purchase or rental something. This term is more likely used for property subject. In some general rent contract, the tenant usually can’t buy the ownership of the property, here is like house, apartments, or boarding house.
Usually, the tenant can only rent the property without having a chance to own the land rights and the building rights. They can only extend the contract until the agreed deadline. But, the different with this contract is the tenant can take over or like ‘buy’ the property if it’s success.
What to Use for Rent to Own Contract
This contract can be formed if you are agreed as the landlord to merge or share the ownership statue with someone. It can also be used if you have a plan to purchase a property or to rental it. As a contract, it can be created without following the rent to own contract guidelines.
There are some of steps or provisions that need to be followed to create proper contract without inflict a financial loss to both party. An agreement is used when there is a tenant that gives interest to rent a property in certain time.
The length of the set amount of time the tenant will take is usually for over several years. The contract will have an option to buy the property at the time or before ending time of the term. Sometimes, the household finds difficulty to create the proper contract.
How to Get Rent to Own Contract
To create it, you will need a template. This template will have formed that only need to be filled and modified depends what you need. There are various rents to own contract free samples to get for free. There are two variants you can arrange, depends on the usage and purpose.
The contract is used for home rent while the other one is rental agreement. For a real estate type contract there are several points about the information of the property. The first point writes about both of the parties that will take an agreement together as seller and buyer.
Then, the complete and factual information is needed. This is including the name of the addressed property in a complete way. The description of the building is also needed. Write down the information as fair as it is. Put down the valuable price of the building with further explanation.
The two last points are about the optional term and the requirement of noticing the exercise option. It’s important to have option term, so that if there is something happen during the contract running, there will be a solution to handle the problem.
What Need to Do with Your Rent to Own Contract
The contract for property will have further clauses that must be agreed by both of the parties. There is a case that the tenant needs to pay one-time premium fee. This is called as option money. The fee is used to reserve the property. All of these need to be included in the contract.
The owner of the property will not offer this option in a legal way before the tenant lease it. There are several points that need to be understood for both of the parties before signing. Pay attention and check twice about your rent to own contract, make sure it’s written in agreement.