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• Housing
• Beware of Rent-to-Own Agreements
  
  Beware of Rent-to-Own Agreements
  
  Para ver este artículo en español por favor, visite aquí. To view this article in Spanish, visit here.
  
  What is a Rent-to-Own Agreement?
  
  Lots of people who sign rent-to-own arrangements or land contracts end up evicted, not property owners. Rent-to-own contracts and land agreements are promises to buy/sell residential or commercial property or a mobile home with time. However, sellers often try to evict purchasers throughout the contract. As a result, numerous purchasers do not end up in fact owning the home, even when they have made payments for several years.
  
  Rent-to-own agreements and land agreements are different from normal rental or own a home. The attributes of standard rental and home ownership are:
  
  Tenant
  
  Ownership
  
  - The property owner is responsible for repair work to keep the unit safe and habitable.
• The property manager is accountable for paying residential or commercial property taxes.
• Usually requires a refundable security deposit.
• Tenants usually can not make modifications to the system without the property owner's consent.
• The landlord can force out very rapidly (a few weeks) for breaking the lease or not paying lease.
  
  - The homeowner is accountable for any repair work and/or maintenance.
• The homeowner is accountable for residential or commercial property taxes/insurance.
• Usually needs a non-refundable down payment towards the purchase rate.
• Free to make any legal modifications or improvements to the residential or commercial property
• If mortgage payments are missed out on, the lending institution needs to foreclose on the residential or commercial property.
  
  Rent-to-own arrangements and land contracts frequently have some terms that look like a rental contract and others that appear like a purchase agreement. This arrangement can give both celebrations some flexibility in regards to their arrangement. However, because sellers usually write the arrangements, the choice of terms often strongly prefers landlord-sellers.
  
  Common Rent-to-Own Agreement Terms:
  
  - Buyer takes residential or commercial property "as is" and is accountable for repairs/upkeep.
• The buyer is accountable for residential or commercial property taxes.
• Deposit towards the purchase rate.
• No improvements or changes without the seller's consent.
• If payments are missed or the contract is broken, the landlord-seller can kick out and keep your money.
  
  Some of these terms might be illegal. A person buying a home generally can not be kicked out in the exact same way as a tenant. A tenant who is renting a home is not responsible for making repairs. If a seller is attempting to evict you, you ought to contact a lawyer immediately.
  
  Many individuals who sign rent-to-own agreements end up evicted and lose all the cash they invested in the home!
  
  A rent-to-own or land agreement may be a good option if you wish to purchase a home today but require a little time to conserve for a down payment or construct up your credit rating. But at LawNY ®, we have seen that some property owners "sell" the same home consistently.
  
  Buyers sign a rent-to-own arrangement or land contract, relocation in, and spruce up the home. After six months or so, the landlord-seller discovers a reason to kick out the purchaser and keeps all of their money and their enhancements. Then the seller gets someone new to sign a rent-to-own agreement.
  
  You have special rights if you have a rent-to-own contract with a manufactured home park.
  
  Please see our short article on mobile home rent-to-own contracts for more info.
  
  What can you do?
  
  BEFORE YOU SIGN:
  
  Read the rent-to-own contract and think about asking a legal representative to review it.
  
  In reading the rent-to-own arrangement, make certain that you comprehend:
  
  - Who will be accountable for repairs, taxes, and insurance coverage?
• How are your payments being used?
• For example, is your regular monthly payment entirely or just partially used to the purchase rate of your home?
• What does the arrangement state about missing or late payments or other agreement infractions? - For example, will you be forced out? What does the contract state about the return of your deposit and any payments you've already made?
  
  Make certain you concur with all terms in the agreement. Every part of your agreement should be in composing. If you are thinking about signing a rent-to-own arrangement or land agreement and have concerns about it, you can call your regional LawNY ® office.
  
  Speak to a HUD-certified housing therapist about options.
  
  Many people indication rent-to-own contracts since they have bad credit, do not desire to handle banks, don't have a large deposit conserved, or think that it is the only choice to own a home. Many programs are offered to help novice property buyers and low-income people transition from leasing to homeownership without signing rent-to-own arrangements or land contracts. A HUD-certified housing counselor can meet you and talk with you about credit concerns and homeownership programs that you may be eligible for. To call a HUD-certified housing counselor near you, call (800) 569-4287. HUD-Certified housing therapists are permitted to charge "sensible and customary" costs for their therapy services, however should provide therapy free of charge to anyone who shows that they can not manage the costs.
  
  AFTER YOU SIGN:
  
  If you are having problems with a rent-to-own contract, get in touch with a lawyer.
  
  If you have problems with an agreement, or have actually received a notification from your seller or court papers relating to a rent-to-own, you can call your regional legal help office. You ought to not ignore notifications or court papers, as the time deadlines for protecting your rights in such a scenario may be really brief.
  
  MAKE A COMPLAINT:
  
  Contact one of the companies listed below to make a problem.
  
  If you have issues about a rent-to-own contract or land agreement, you can make a complaint to the New York Attorney general of the United States's Office Consumer Frauds Bureau. To learn more, see http://www.ag.ny.gov/consumer-frauds/Filing-a-Consumer-Complaint. You can call the regional workplaces at:
  
  Rochester Regional Office 144 Exchange Boulevard, Suite 200 Rochester, NY 14614-2176 ( 585) 546-7430
  
  Binghamton Regional Office 44 Hawley Street Binghamton, NY 13901 Main Line: (607) 251-2770 Consumer Frauds: (607-251-2764
  
  If you have issues about a rent-to-own contract in a mobile home park, you can also make a grievance to the New York State Homes and Community Renewal office by calling their Manufactured Homes Hotline at 1-800-432-4210.
  
  Housing therapy resources for New Yorkers include:
  
  New York's Homeowner Protection Program (HOPP) links with housing therapists and legal services at no charge. Call the HOPP hotline at (855) 466-3456 or check out homeownerhelpny.com.
  
  24-Hour assistance is readily available toll-free on the HOPE NOW hotline at 888-995-HOPE (888-995-4673). HOPE NOW is an alliance of HUD-approved therapy representatives, servicers, and investors that provide totally free support.
  
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  (c) Legal Assistance of Western New York City, Inc. ®
  
  This short article provides basic info about this topic. Laws impacting this subject may have changed given that this article was written. For particular legal suggestions about an issue you are having, get the suggestions of an attorney. Receiving this details does not make you a client of our workplace.