Contracts in the world of real estate can take on almost any form to which the two parties may agree. This includes contracts that allow for a tenant on land to rent the property with the understanding that they will eventually take final possession of the land. We refer to these contracts as rent to own agreements.

When forming these contracts, it is vital to strictly define the rights of all parties. This includes setting a final purchase price, placing time limits on the proposed transaction, and making it clear that the payment of any rent will go towards reducing the eventual purchase price. An Altus rent to own agreement lawyer could help both landowners and tenants draft rent to own agreements that properly arrange for a structured future sale.

How Do Rent to Own Agreements Interact with Typical Real Estate Contracts?

Real estate contracts generally fall into one of two categories. If a landowner intends to rent it out to a tenant, they will need a comprehensive lease agreement in place that outlines the rights and obligations of all parties. This includes the common implied warranty of habitability under Oklahoma Statute § 41-118. The other leading form of real estate contract is a purchase/sale agreement. In this situation, the current owner is looking to sell the property to a prospective buyer.

An interesting hybrid of these two forms of agreements exists as a rent to own agreement. This agreement means a tenant lives on the property while making periodic payments, as is typical in any other rental agreement. However, at the same time, the agreement will state that the rent payments function as applied purchase payments that go to the current owner. When the tenant has made the full scope of their payments, they become the owner of the land outright. An Altus rent to own agreement attorney could provide more information about how these agreements act as a way for a tenant to become an eventual owner of land and how they could assist current landowners to find a way to sell their property outside of the traditional process of hiring an agent.

Typical Clauses to Include in Rent to Own Agreements

Rent to own contracts occupy a special place in real estate law in that they must fulfill two purposes. First, they must serve as a rental agreement between the current owner of the land and the tenants. This means that it must comply with all state laws concerning the offering of land as a rental property as they apply to residential or commercial agreements. Common clauses in these agreements include a set term, rent amount, and payments of utilities.

What separates these agreements from typical rental contracts is that the landlord will allow the tenant to live on the land with the understanding that the tenant will eventually own the property. All rent payments that a tenant makes will go towards lowering an eventual future sale price. At the parties’ request, the sale may take place once the full value of the property is met by these lease payments or for a lump sum in the future.

An Altus rent to own agreement lawyer could draft contacts that meet your needs. We could also enforce these contracts on behalf of tenants who wish to take advantage of their right to buy but are having difficulty dealing with their landlord under such an agreement.

Contact an Altus Rent to Own Agreement Attorney Today

There are many reasons to enter into a rent to own agreement. For tenants, this can serve as a way to eventually own property without needing to pay a lump sum for a traditional down payment and mortgage loan. For current owners, it can be a way to ensure the property is occupied long-term and an eventual sale of the property if the tenant upholds the terms of the agreement.

Whether you are the current owner of property looking to create these contracts or are a current tenant looking to exercise your ability to buy, an Altus rent to own agreement lawyer may be able to help. Speak with us today to discover more.