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Rent To Own
A contract between a property owner (the landlord) and the tenant, where the tenant pays for the option to buy the property at some time in the future, before the end of the lease term. To be enforceable, the option contract must specify, at a minimum, the property's selling price (or an objective way of arriving at the selling price, such as submitting the matter to brokers chosen by each side), the date or time window in which the tenant must exercise the option, and the manner of notifying the landlord. In some states, rent-to-own option contracts must be accompanied by the same property disclosures that are required in a standard home sale. Because exercising an option contract creates an irrevocable sales contract, the landlord and tenant should address other issues that are common in property sales -- such as terms of payment, time and place of closing, nature of title to be given, and any adjustments to be made at closing.
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