A contract signed between the property owner and a renter planning to buy that property for some specific time is known as rent to own a contract. Where paying the whole amount for purchasing any property or home is not possible, this rent-to-own agreement works best. The tenant must pay an amount specified by the owner is termed a down payment. In addition to the down payment, a tenant must pay an amount as demanded.
To take advice from any legal person is best and most appreciated, but one should know exactly what should be included in the contract and what should be excluded. The requirements of this type of contract include the requirements that are discussed below.
The agreement enclose
The contract must contain a few necessary details and provisions. As with every other contract, this too should discuss the possible terms and conditions discussed between both parties. But the details of the lessee and the lessor must be given proper care and should be mentioned accurately.
Other details include the lease term and information regarding the lease agreement like rentals and down payments. Particulars of the purchase price, option money, rent, maintenance amount, and other numerals must be mentioned correctly in the contract.
This document must also contain the other required provisions and points that were discussed and agreed upon by both parties before the contract was made. These provisions must be read thoroughly and signed by both parties and a date must be written down on which the contract was signed.
Do not forget
The contract must identify who is the owner of the property and to whom the property is being rented. To be on the safe side a date on which the renter will move into the property is to be specified. In the contract amount deposited by the renter must also be specified. The amount deposited usually ranges between 1-2% of the actual price of the property. The purchase price of the property is also written on the contract. Both the parties must agree on the particular price. The contract must also include the amount of rent paid and how it will be paid. Either the owner collects the amount himself, or it is to be deposited using a cheque.
In the case of any delay in the rent what actions could be taken and what are the issues that could arise? Specify in the contract who is authorized to maintain the property. This point states the responsibility to repair, decorate, and pay off the utility bills.
A sound contract comprises all the points specified above yet, these can be altered according to the requirements.
The Contract File: 59 KB
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