Is a lease-to-own contract a legal sale of a property?
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Is a lease-to-own contract a legal sale of a property?
My wife moved into my house after being married. She bought her house at the peak of the market and now the house is valued at $50,000 less than what we owe. The home owners association will not allow us to rent to home out, and we cannot afford to come up with the money to pay the difference. We cannot do a short sale because it is not our primary residence and we would have to pay the difference of the sale. If a lease to own is a legal sale, would we have a winning chance to fight the board of the CCR.
Asked on August 29, 2011 Washington
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
A lease to own situation between a landlord and a tenant is simply a tenancy with an option given to the tenant to possibly buy the rented property at a set price and terms later down the road. Until legal title is transferred by the landlord to the tenant under the lease to own agreement, there has been no sale of the property designated in the lease agreement.
A lease to own contract is a legal contract to buy real property. The problem with such an agreement is that many times the purchase election is never made by the tenant.
You should contact your homeowner's association to see if they will allow you to lease out your unit to a tenant with an express provision where the tenant has an option to buy the property under the agreement's express terms.
Good luck.
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