So You Want To "Lease-Purchase"

By
Real Estate Agent with The Property Shop PB 00067892
I was reading Lease Purchase Pitfalls: Look before you leap by Laura Fowler of The Fowler Law Firm in Austin, TX. I decided to share SOME of her "cautionary notes" since we are seeing such an increase in these arrangements. "Lease-purchase meaning an agreement between the owner and another who rents for a period of time because they desire to purchase the home at a later date."
  1. Lease-Purchase agreements are regulated by state law or in some instances a state agency.
  2. Lease-Purchase agreements are Executory Contracts.
  3. Lease-Purchase agreements are NOT just rental contracts followed by sales contracts.
  4. If the seller has any mortgage or encumbrance he/she must be certain that the proposed Lease-Purchase does not violate the terms and conditions of the pre-existing loan/mortgage. For example: a "Due On Sale" clause.
  5. In many states, if any part of the discussion that led to this Lease-Purchase proposal was in a language other than English, then ALL of the required documents must be in the same language.

We ARE NOT attorney's and encourage you to seek legal counsel in order to make an informed decision.

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