Two op­tions for rent-to-own

Weekend Argus (Saturday Edition) - - PROPERTY -

A RENT-to-own agree­ment is es­sen­tially a fixed-term lease, which in­cludes an op­tion for a ten­ant to pur­chase their home from their land­lord – at a price de­ter­mined up­front at the ter­mi­na­tion of, or prior to ter­mi­na­tion of, their lease. In some agree­ments a big­ger than usual rental is paid to cre­ate a de­posit for the pur­chase. In other agree­ments a ten­ant will pay a set amount to­wards rental and then an ad­di­tional monthly amount to­wards the pur­chase price of the property.

The rent-to-own doc­u­ments must also in­clude a sale agree­ment that is au­to­mat­i­cally in­tro­duced once the op­tion to buy is ex­er­cised. The property will then be pur­chased once the ten­ant has se­cured a home loan.

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