Rent to Buy and Buy to Rent are two contracts aimed at buying and selling real estate, where payment takes place in a deferred manner .
They represent suitable solutions to support those who do not have the possibility to buy immediately in cash or are unable to obtain a mortgage at that time and/or need to sell their property before buying a new one https://www.texassellmyhouse.com/sell-my-house-fast-cibolo-tx/
What is Rent to buy and how does it work?
The Rent to Buy is defined as a “contract of enjoyment based on the subsequent sale of property” and can be applied to all types of properties. In simpler words, it is a contract that allows you to live in the house immediately, foreseeing the subsequent purchase within a certain deadline. Rent to buy is frequently used by builders and private individuals for the sale of homes to families. Upon stipulation of the contract, the family (generally the tenant) has two advantages:
the immediate availability and for the established period of the house to live in
the right to purchase a property at a specified price, of which all the positive and negative characteristics will be known, being able to use it for an appropriate period.
The contract is divided into two phases:
- a) the enjoyment (use) phase . The owner delivers the property to the tenant for a certain period (within which the tenant has the right to buy). The tenant has the obligation to pay an agreed fee both for the ” use component (enjoyment)” and for the “purchase component”.
It should be noted that this right of enjoyment is a personal right of a mandatory nature, not to be confused with a real right (such as, for example, the right of residence or usufruct). Sub-letting is not permitted.
- b) the phase of transfer of ownership . This phase is eventual. There is in fact no reciprocal obligation of the parties to transfer the property at the end of the contract. There is instead a right of the lessee to exercise the right to purchase. The lessee is therefore free to buy or not at the price, payment method and term established in the contract. It is permitted to include in the contract the right to have the “ person to be named ” intervene in the deed of sale .