Archives For Lease Purchase

North Carolina General Statutes Chapter 47G Option to Purchase Contracts Executed With Lease Agreements

Be sure to read these links!

  • N.C. Gen. Stat. § 47G-1.   Definitions
    The following definitions apply in this Chapter: (1) Covered lease agreement or lease agreement. – A residential lease agreement that is combined with, or…
  • N.C. Gen. Stat. § 47G-2.   Minimum contents of option contracts; recordation
    (a) Writing Required. – Every option contract, including any assignment of an option contract, shall be evidenced by a contract signed and acknowledged by…
  • N.C. Gen. Stat. § 47G-3.   Application of Landlord Tenant Law
    The provisions of Chapter 42 of the General Statutes apply to covered lease agreements. (2010-164, s. 3.)
  • N.C. Gen. Stat. § 47G-4.   Condition of forfeiture; right to cure
    A purchaser’s right to exercise an option to purchase property under an option contract cannot be forfeited unless a breach has occurred in one…
  • N.C. Gen. Stat. § 47G-5.   Notice of default and intent to forfeit
    (a) A notice of default and intent to forfeit shall specify the nature of the default, the amount of the default if the default…
  • N.C. Gen. Stat. § 47G-6.   Effect of seller’s default on loan secured by mortgage or lien on property
    If, at any time prior to the expiration of the time period in which the option purchaser has a right to exercise the option…
  • N.C. Gen. Stat. § 47G-7.   Remedies
    A violation of any provision of this Chapter constitutes an unfair trade practice under G.S. 75-1.1. An option purchaser may bring an action for…

https://www.youtube-nocookie.com/embed/h-JmELAYALI?rel=0

4 home lease-option questions
Previous
1 of 5

Next

4 home lease-option questions | Hero Images/Getty Images

If you lack a down payment or your credit is subpar, it can be frustrating when you find the home you want. A lease-option — a contract that allows you to buy a home after your lease term ends — can be a solution to the problem.

What is a lease-option?

A contract in which a landlord and tenant agree that, at the end of a specified period, the renter may buy the property. The tenant pays rent plus an additional amount each month. At the end of the lease, the renter may use the cumulative extra payments as a down payment.

Also called:

  • Rent-option
  • Lease-to-buy option
  • Rent-to-buy option
  • Lease-with-option-to-buy
  • Lease with option to purchase
  • Rent-to-own

Before you sign, have a lawyer review the contract. And ask the following 4 questions.

RATE SEARCH: Shop today for an FHA loan.

Previous
1 of 5

Next

Hide Hide all
How is the deal structured? | Portra Images/Getty Images

How is the deal structured?

Usually, part of your rent is credited toward your future purchase.

“A rent-to-own contract needs to be devised so that the full rental amount is more than market rate for that size, style and age of home in that specific neighborhood,” says Marcy Imperi, a Realtor with Century 21 HomeStar in Highland Heights, Ohio.

Imperi says that if you’re paying market-rate rent, a lender may not credit any of the funds you paid to your landlord toward the purchase. Talk to a lender so you understand how you can qualify for a loan in the future.

RATE SEARCH: Comparison-shop for a VA loan today.


Who's responsible for what? | Andrejs Zemdega/Getty Images

Who’s responsible for what?

A good lease-option agreement will put in writing who is responsible for maintenance, repairs and upkeep, Imperi says.

Renters need renter’s insurance and owners need landlord’s insurance. Both renters and owners should keep good records of payments for the lender when you apply for a loan.

The agreement should spell out who is paying for any association fees and utilities, too.

RATE SEARCH: Shop FHA-approved lenders today.


How will the deed be transferred to the buyer? | Andrejs Zemdega/Getty Images

How will the deed be transferred to the buyer?

Buyers should know ahead of time the deposit needed to complete the purchase, says Jeff Lesley, a broker and Realtor with Century 21 Sweyer & Associates in Wilmington, North Carolina.

“If the sellers are taking the risk of removing their home from the market for a deferred lump sum of cash flow, then what nonrefundable commitment do they have from you?” asks Lesley.

Imperi says buyers and sellers who agree on a purchase price in advance should include a clause in the purchase agreement that the sale is contingent on an appraisal. Home values can fluctuate during your lease period, so it’s important to know if the price can be adjusted before you buy.

RATE SEARCH: Find a low-down payment mortgage today.


What happens if you're not ready to buy when the contract ends? | Andrejs Zemdega/Getty Images

What happens if you’re not ready to buy when the contract ends?

Lesley says there should be a clause in the contract about your options, particularly if your credit still isn’t up to par.

“Unless you’re working on credit repair and have a solid plan to be eligible for a loan within 2 years or less, this is just a rental, not a rent-to-own,” Imperi says. “If you’re enrolled in a credit repair program, you should be sharing progress updates with your landlord.”

Understanding your rights and responsibilities in a rent-to-own agreement is essential. If you don’t, you could end up in a rent-to-rent situation without making any progress toward homeownership.

Reference Book – A Real Estate Guide

* Please note, format and page numbers differ from the printed version. The printed version will be available for purchase after January 5, 2011. To purchase a copy, submit a Publications Request (RE 350) . The chapters of the Reference Book below are in PDF format. You will need Adobe Reader to view them.

Reference Book

  • Introduction
    Cover, Preface, Location of Department of Real Estate Offices, Past Real Estate Commissioners, A Word of Caution
  • Chapter 1 – The California Department of Real Estate
    Government Regulation of Brokerage Transactions, Original Real Estate Broker License, Corporate Real Estate License, Original Salesperson License, License Renewals – Brokers and Salespersons, Other License Information, Continuing Education, Miscellaneous Information, Prepaid Residential Listing Service License, Enforcement of Real Estate Law, Discrimination, Notice of Discriminatory Restrictions, Subdivisions, Department Publications, Recovery Account
  • Chapter 2 – The Real Estate License Examinations
    Scope of Examination, Preparing for an Exam, Exam Construction, Examination Weighting, Exam Outline, Exam Rules – Exam Subversion, Materials, Question Construction, Multiple Choice Exam, Q and A Analysis, Sample Multiple Choice Items
  • Chapter 3 – Trade and Professional Associations
    Real Estate Associations and Boards, Related Associations, Ethics
  • Chapter 4 – Property
    Historical Derivations, The Modern View, Personal Property, Fixtures, Legal Difference Between Real and Personal Property, Land Descriptions, Other Description Methods
  • Chapter 5 – Title to Real Property
    California Adopts a Recording System, Ownership of Real Property, Separate Ownership, Concurrent Ownership, Tenancy in Partnership, Encumbrances, Mechanic’s Liens, Design Professional’s Lien, Attachments and Judgments, Easements, Restrictions, Encroachments, Homestead Exemption, Assuring Marketability of Title
  • Chapter 6 – Transfer of Interests in Real Property
    Contracts in General, Essential Elements of a Contract, Statute of Frauds, Interpretation, Performance and Discharge of Contracts, Real Estate Contracts, Acquisition and Transfer of Real Estate
  • Chapter 7 – Principal Instruments of Transfer
    A Backward Look, the Pattern Today, Deeds in General, Types of Deeds
  • Chapter 8 – Escrow
    Definition, Essential Elements, Escrow Holder, Instructions, Complete Escrow, General Escrow Principles, General Escrow Procedures, Proration, Termination, Cancellation of Escrow – Cancellation of Purchase Contract, Who May Act As Escrow Agent, Audit, Prohibited Conduct, Relationship of Real Estate Broker and the Escrow Holder, Designating the Escrow Holder, Developer Controlled Escrows – Prohibition
  • Chapter 9 – Landlord and Tenant
    Types of Leasehold Estates, Dual Legal Nature of Lease, Verbal and Written Agreements, Lease Ingredients, Contract and Conveyance Issues, Rights and Obligations of Parties to a Lease, Condemnation of Leased Property, Notice Upon Tenant Default, Non-Waivable Tenant Rights, Remedies of Landlord, Disclosures by Owner or Rental Agent to Tenant
  • Chapter 10 – Agency
    Introduction, Creation of Agency Relationships, Authority of Agent, Duties Owed to Principals, Duties Owed to Third Parties, Rights of Agent, Termination of Agency, Special Brokerage Relationships, Licensee Acting for Own Account, Unlawful Employment and Compensation, Broker-Salesperson Relationship, Conclusion
  • Chapter 11 – Impact of the Penal Code and Other Statutes
    Penal Code, Unlawful Practice of Law, Business and Professions Code, Civil Code, Corporations Code
  • Chapter 12 – Real Estate Finance
    Background, The Economy, The Mortgage Market, Overview of the Loan Process, Details of the Loan Process, Federal and State Disclosure and Notice of Rights, Promissory Notes, Trust Deeds and Mortgages, Junior Trust Deeds and Mortgages, Other Types of Mortgage and Trust Deed Loans, Alternative Financing, Effects of Security, Due on Sale, Lender’s Remedy in Case of Default, Basic Interest Rate Mathematics, The Tools of Analysis
  • Chapter 13 – Non-Mortgage Alternatives To Real Estate Financing
    Syndicate Equity Financing, Commercial Loan, Bonds or Stocks, Long-Term Lease, Exchange, Sale-Leaseback, Sales Contract (Land Contract), Security Agreements (Personal Property)
  • Chapter 14 – Real Estate Syndicates and Investment Trusts
    Real Estate Syndication, Real Estate Investment Trusts
  • Chapter 15 – Appraisal and Valuation
    Theoretical Concepts of Value and Definitions, Principles of Valuation, Basic Valuation Definitions, Forces Influencing Value, Economic Trends Affecting Real Estate Value, Site Analysis and Valuation, Architectural Styles and Functional Utility, The Appraisal Process and Methods, Methods of Appraising Properties, The Sales Comparison Approach, Cost Approach, Depreciation, Income (Capitalization) Approach, Income Approach Process, Income Approach Applied, Residual Techniques, Yield Capitalization Analysis, Gross Rent Multiplier, Summary, Appraisal of Manufactured Homes (Mobilehomes), Evaluating the Single Family Residence and Small Multi-Family Dwellings, Typical Outline for Writing the Single Family Residence Narrative Appraisal Report, Conclusion, Additional Practice Problems, The Office of Real Estate Appraisers (OREA)
  • Chapter 16 – Taxation and Assessments
    Property Taxes, Taxation of Mobilehomes, Special Assessments, Certain Assessment Statutes, Federal Taxes, Documentary Transfer Tax, State Taxes, Miscellaneous Taxes, Acquisition of Real Property, Income Taxation
  • Chapter 17 – Subdivisions and Other Public Controls
    Basic Subdivision Laws, Subdivision Definitions, Functions in Land Subdivision, Compliance and Governmental Consultation, Types of Subdivisions, Compliance With Subdivided Lands Law, Handling of Purchasers’ Deposit Money, Covenants, Conditions and Restrictions, Additional Provisions, Grounds For Denial of Public Report, Subdivision Map Act, Preliminary Planning Considerations, Basic Steps in Final Map Preparation and Approval, Types of Maps, Tentative Map Preparation, Tentative Map Filing, Final Map, Parcel Map, Other Public Controls, Health and Sanitation, Eminent Domain, Water Conservation and Flood Control, Interstate Land Sales Full Disclosure Act
  • Chapter 18 – Planning, Zoning, and Redevelopment
    The Need For Planning, General Plans, Redevelopment
  • Chapter 19 – Brokerage
    Brokerage as a Part of the Real Estate Business, Other Specialists, Operations, Office Size – Management, Office Size, Career Building, The Broker and the New Salesperson, Specialization, A Broker’s Related Pursuits, Professionalism, Mobilehome Sales
  • Chapter 20 – Contract Provisions and Disclosures in a Residential Real Estate Transaction
    A Basic Transaction, A Basic Listing, Purchase Contract/Receipt of Deposit, Disclosures
  • Chapter 21 – Trust Funds
    General Information, Trust Fund Bank Accounts, Accounting Records, Other Accounting Systems and Records, Recording Process, Reconciliation of Accounting Records, Documentation Requirements, Additional Documentation Requirements, Audits and Examinations, Sample Transactions, Questions and Answers Regarding Trust Fund Requirements and Record Keeping, Summary, Exhibits
  • Chapter 22 – Property Management
    Professional Organization, Property Managers and Professional Designations, Functions of a Property Manager, Specific Duties of the Property Manager, Earnings, Accounting Records For Property Management
  • Chapter 23 – Developers of Land and Buildings
    Subdividing, Developer-Builder, Home Construction
  • Chapter 24 – Business Opportunities
    Definition, Agency, Small Businesses and the Small Business Administration, Form of Business Organization, Form of Sale, Why an Escrow?, Buyer’s Evaluation, Motives of Buyers and Sellers, Counseling the Buyer, Satisfying Government Agencies, Listings, Preparing the Listing, Establishing Value, Valuation Methods, Lease, Goodwill, Fictitious Business Name, Franchising, Bulk Sales and the Uniform Commercial Code, California Sales and Use Tax Provisions, Alcoholic Beverage Control Act
  • Chapter 25 – Mineral, Oil and Gas Brokerage
    History, Mineral, Oil and Gas Brokerage, 1994 – No Separate License Requirements
  • Chapter 26 – Tables, Formulas, and Measurements
  • Chapter 27 – Glossary