Monday, April 5, 2010

Owner Financed Lots

The office has received some rent-to-own contracts and certain criteria must be met for these agreements to be valid. If the following items are not included, the agreement will be an assumed rental:

  • There must be an equitable interest in the property, which means there must be a significant down payment of at least 20% of the sales price. For example, $500 down and $300 per month for the next 15 years is not an equitable interest in the property.
  • An interest rate must be included.
  • Terms of the contract i.e., monthly payment, due date, and maturity date.
  • The contract must be recorded at the county.
  • The seller must relinquish their owner cards before new owner cards can be issued to the buyer.

    Ownership can be conveyed with the presence of a deed of trust or a valid lease/purchase contract showing an equitable interest in the property. If you need additional information or have any questions, please contact the office.