What are my options when a tenant defaults on a rent to own lease agreement?

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What are my options when a tenant defaults on a rent to own lease agreement?

I did a rent to own to own on my property. They have made all their payments but have subleased the property and notified me the day of. The agreement states that they must have an active insurance policy on the property or the contract is void, yet I have no way of contacting them to get this proof. It has been 3 months since they signed and since we forgot to put no subletting in the contract we allowed them to sublease the house, but they left no forwarding info and I need proof of insurance. What can I do about the sublease and insurance? I am sure they don’t have insurance.

Asked on September 2, 2010 under Real Estate Law, South Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The most important thing here is to first make sure that your property is insured.  It is still in your name, correct?  No deed transfer?  Then you have what is known as an insurable interest in the property.  Depending on how our rent to own contract was written, the tenant may not have had the same interest and may not have been able to even get the insurance that you wanted (not renters insurance but owners insurance, correct?) so you may have lost nothing here.  Get the insurance yourself.  You have a right to charge the people you made the contract with (not the sub tenants) for the insurance when the time comes for them to ask that you transfer the deed.  And that time will come.  Better to be safe than sorry.  I would also send them a letter to the last known address or get it from the subtenant advising what you are doing as they are in violation of the contract.  Good luck.


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