Rent to Own SAQ – What if the tenant-buyer defaults in a Rent to Own?

By far, the single more important “should ask” question about rent to own is “what happens if the client defaults?”

Rent to own is an alternative to traditional mortgage financing, and the handling of default is also quite similar.

If a client stops making payments or otherwise violates the terms of their agreement, they will be considered to be in default. A defaulting client will lose their option fee and any accumulated option credits.

Just as the bank would use the foreclosure process to take back the property in the event of default, the investor in a rent to own transaction will use the eviction process to do the same.

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