The full explanation
It is not the same as a contract for deed; Minnesota law, for example, treats them separately. The New York Department of Financial Services warns that these agreements are often marketed to people in financial trouble, may carry harsh terms with few safeguards, and may shift all repairs to you that the state's law would put on the landlord.
An example
Luisa is about to rent a home with an option to buy it. Before signing, she asks for the agreement to say in writing how much of each rent payment counts toward the purchase and who pays for repairs.
You will see it in…
- Ads for rent-to-own or lease-to-own homes
- A lease with an option to purchase
- The papers a lender asks for to use a rent credit
