Hi, we have 2 new homes in our park and have had no luck selling them. We are in the process of doing a lease w/ option to purchase. Can anyone give advice on the documents needed for this and how the process works. We recently found a TMHA document “Option to Purchase Addendum” but are a bit confused by the wording and what exactly it means. If anyone is familiar with this or can give advice on how to fill this out as well, it would be greatly appreciated. Also, if we need a lease along with this document and if so, what should be the term of the lease. Thanks in advance!
Zippy can handle this for you. We get these tenants into a Zippy loan and you still get the home payment each month without having to deal with these sketchy lease option agreements.
Happy to discuss how we can help!
I’ve done several of these. Let me first say to seek counsel on your individual scenario as I am not a legal professional. Further, it depends on your state as the laws vary. My summary below is for information purposes.
We do separate lease and option docs. The lease typically spans the duration of the option, though it doesn’t necessarily have to. On my Option, we explicitly say “no equitable interest exists on the property for tenant-occupant until all terms of the agreement are satisfied and title is transferred”. Further, we dont call any monies given up front deposits. Nor do we charge interest (a common pitfall). Charging interest now infers you are financing and are dealing with a buyer (not a tenant). In the event of default, it could get ugly and if goes to court, you could be forced to foreclose instead of evict. Foreclosure (thousands $$ and months) vs eviction (maybe $100 and 30 days), depending on state.
We have a standard Lot Lease agreement and then use a separate rent credit agreement rather than an option to purchase or rent to own agreement. We’ve found Rent Credit is easier to manage.