In the rent to own business, scammers resort to all kinds of gimmicks to get their properties filled. You must do your homework to ensure you do not fall victim to the small print or vague wording often appearing in the scammers’ contracts.
Here’s a classic gimmick perpetrated by some rent to own scammers – they advertise a low monthly payment, only to surprise you later with additional fees included as small print in the contract.
“In addition to the rent, taxes, insurance and homeowner’s association dues and assessments will be billed to the tenant quarterly with 1st payment due 3 months from contract date (15% late fee for all payments not received by due date) or monthly.”
Read the Small Print…
Did you know that the advertised monthly payment for a rent-to-own home with an Orlando area company offering rent-to-own homes does not include taxes and insurance, a minimum additional $350.00-$400.00 per month?
What if you had discovered this little $350.00-$400.00 per MONTH oversight AFTER you had signed the contract and AFTER you had fine-tuned your budget to get the keys to your dream home?
“20. RE-RENTING ACCESS AND FEE: In the event this agreement is terminated prior to the date stated in paragraph 1, or should a 30-day written notice to vacate not be submitted as required herein, the parties to this agreement agree that the Landlord/Agent shall be deemed to be damaged in re-rental costs difficult to determine. To cover expenses including but not exclusive of those for advertising, bookkeeping and leasing fees, it is agreed that a re-rental fee equal to the then current monthly rental amount, less $5.00 will be assessed to Tenant as liquidated damages for the aforementioned expenses”.
Small Print Destroys Dreams!
According to this particular company’s lease-option agreement, should you choose not to exercise your option to purchase and not submit a letter within 30 days prior to vacating, you will incur “liquidated damages” in the amount of a sum equal to the monthly payment less $5.00.
“If a mortgage is obtained through a firm other than XYZ, there will be a fee amounting to 2% of the loan amount, payable to XYZ”.
Should you choose not to engage this rent-to-own company’s in-house lender for any reason, you will incur a penalty equal to 2% of the loan amount.
What’s the lesson?
Simple Solution to Your Nightmare
Read all paperwork very carefully before signing anything. As logical as this appears, people desperate to get a home with rent-to-own terms somehow throw this important suggestion out the window.
They seem to think that they have to take unnecessary risks to get a nice home in a nice neighborhood.
If you do not understand every word of what you are asked to sign, take the paper to your attorney. Perhaps not one of the sample clauses from real contracts appearing in this report will harm you emotionally or financially; however, each clause could possibly surprise and possibly harm you if you are unaware.
If the person offering this home with rent-to-own terms refuses to allow you to have the paperwork reviewed, leave that person’s office – don’t do business with that person.