Picture this agreement between two players in a board game: ‘If you land on my property 10 times, pay $5 more each time, and then you can buy it for $200.’ The first player still owns the property for those 10 turns, but the second player has secured a set price and (potentially) first-in-line status to buy. It’s more complicated than just paying rent, and it has a different set of risks than just selling and buying. The final deal is set in the future, and is less predictable. These two players have basically constructed a rent-to-own agreement. They have a rental agreement, with an option-to-buy agreement attached. Rent-to-own agreements are used in the real world as well, for things ranging from cars to buildings. Rent-to-own gives parties a different set of tools and risks to reach agreement. They can be complex, and legal advice may be prudent.
Posted On: September 24, 2022