Question:
Are there any risks for an Owner using a Rent To Own Program?
Answer:
The problem at the outset is the colloquial expression “rent to own”. If you choose the word “rent” and you place it in your agreement, then you are going to be stuck with the Residential Tenancies Act (RTA) and the Landlord and Tenant Board (LTB). So, avoid that completely.
Use the long form Agreement of Purchase and Sale. That way all the payments are made towards the purchase price on a regular basis. Possession takes place at the outset, the Deed follows final payment.
Don’t call the payments a deposit. Once they hit 20% of the total, you are at risk of repaying it all back. Be sure to use “part payment of the purchase price”.
You will need a lawyer to draft it up. There are lots of bad examples of poorly drafted contracts out there. So, be careful.
Brian Madigan LL.B., Broker