With rent-to-own properties (lease purchases), a seller (lessor) of a property will offer a lessee (consumer) a home lease. After a specified time period, the lessee may choose to purchase the property for an agreed-upon price. The buyer is charged an option that comes to 1 to 5 percent of the property's purchase price. If the buyer chooses not to purchase the home after a set period of years, she will lose the option fee. The State of Virginia sets rules for rent-to-own properties under Chapter 59.1, Section 207 of the Virginia Code (Virginia Lease-Purchase Agreement Act of 1988).
Disclosure
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According to the Virginia Lease-Purchase Agreement Act, the lessor (person who leases the property) must disclose to a renter how many payments will be necessary in order for the renter to acquire complete ownership of the property. The lessor must also disclose to the lessee the amount of these payments and how they will be paid. The seller must also provide the renter with a statement saying that the consumer will not own the property until all payments are made to the seller. The seller must disclose any upfront sums that must be paid by the consumer in order to satisfy the rent-to-own agreement. This can include a down payment, which is a lump sum of money put down on the property by the consumer.
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Description
According to Chapter 59.1, Section 207.21 of the Virginia Code, the leased property must be described by the lessor in order to adequately identify the property for the consumer. A tax plat number must be provided to the renter, as well as a statement that lists whether the property is used or new. Lessors must also describe any damages that are present in the leased property.
Maintenance
A Virginia rent-to-own contract must adequately describe who will make repairs to and maintain the property during a lease. These responsibilities must be clearly outlined. If the consumer chooses to exercise a rent-to-own option instead of leasing, the consumer is responsible for repairs and maintenance. If any manufacturer's warranties are present on home components, the lessor must transfer these warranties to the buyer.
Forfeiture
According to the Virginia Lease-Purchase Agreement Act, a consumer may choose to terminate a lease agreement after the lease has expired but will lose his option fee to the lessor. A lease agreement does not obligate a lessee to purchase a property. This forfeiture applies only if the consumer maintains the property in good condition and pays all due rental payments. If the consumer makes late rental payments, he may reinstate the lease agreement as long as all past-due payments are made current. If the consumer has paid off fewer than two-thirds of the property's price and surrenders the property to the lessor, the consumer may change his mind within 21 days. If more than two-thirds of the Virginia rent-to-own-property has been paid off and the property is surrendered to the lessor, the consumer may change his mind within 45 days.