People who don't have the cash or good credit to purchase household items—like appliances, furniture, computers, and electronics—sometimes choose to rent the goods with an option to buy them later.
Florida law governs the contents of rent-to-own contracts. If the contract contains terms prohibited under the law, those terms are void and can't be enforced against you in court.
Moreover, anyone who violates the law may be subject to penalties, including fines, and you could recover damages.
Renting to own personal property, like a sofa or a television, is a way to acquire the property without committing to pay the full purchase price upfront. By entering into a rent-to-own contract, you agree to a short-term rental arrangement.
You sign a contract agreeing to make regular weekly or monthly payments and then you get the item. The longer the contract term, the less you'll pay each week or month. But you'll pay more in total because of price markups and fees.
Under a rent-to-own contract, the person or business collecting rental payments from you is called the "lessor." The person paying the rent is called the "lessee."
Each time you pay the rent and keep the rented property, the agreement renews for another term until you've paid the purchase price in full and become the property owner. If you decide not to go through with the purchase, you can terminate the agreement by returning the property at the end of any rental period. But you might not get back any of the money you've paid. And if you simply stop paying, you'll probably lose the item and the money you've paid.
Florida law requires that any rent-to-own contract be in writing and signed by both parties. It must include all essential terms before it is signed, and a copy of the signed contract must be delivered to you. The printed portion of the contract must be in at least six-point type and must include a notice which informs you that you should not sign the contract until all of the blanks are filled in and that you must be provided an exact copy of the signed agreement which you should keep for your legal protection.
The agreement must state all information clearly, using commonly understood words and phrases. It must be divided into sections with the topics clearly labeled. All amounts and percentages must be stated in numbers rather than words. Additional information may be included, but it can't contradict, detract from, or draw attention away from any disclosures the law requires.
The following details must be included in Florida rent-to-own contracts:
The following terms are prohibited by law. If they're included in your contract, they're void and not enforceable against you. The agreement can't:
Florida law also limits the type of additional costs the rent-to-own lessor may charge.
If you stop making payments under the agreement, you can preserve your right to reinstate the contract within 60 days if you promptly surrender or return the property to the lessor or its agent upon request. The 60-day time frame is calculated from the last day of the rental period for which you did pay. The total amount required to reinstate may include all unpaid rental payments, any rental renewal charges incurred, a reinstatement fee of no more than five dollars, and a delivery charge if the property needs to be redelivered.
If you reinstate, the lessor must provide you with the same property that you were renting before or substitute property of comparable quality and condition. If substitute property is provided, the disclosure as to whether the property is new or used must be made again.
The potential benefits of rent-to-own contracts include the ability to build credit (some rent-to-own plans report your payments to the credit reporting agencies, but others don't) and eventually own the property.
But these kinds of contracts also have significant downsides, such as high-interest rates and expensive fees. Also, you could end up paying a lot more than the item is worth, often at least twice what you'd pay in cash, sometimes more. In addition, if you default (fall behind in payments), you might face hounding collection calls and harassment to try to get you to pay up.
A lessor that wilfully violates the law may be subject to fines. Provided you have given the lessor 30 days' notice of a violation that has not been corrected, you can sue for actual damages or 25% of the total cost of the purchase price plus attorneys' fees and court costs. The lessor's remedies are limited to those in the agreement and may not exceed the amounts set under the law, which can include attorneys' fees and costs.
If you're having issues with the lessor of a rent-to-own contract, such as aggressive debt collection tactics, you can file a complaint with the Federal Trade Commission (FTC). For more information about your rights under rent-to-own contracts, contact the Florida state attorney general's office or the Florida Division of Consumer Services. You might also consider contacting a consumer protection attorney.
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