Lots of people are interested in our easy Rent-to-Own agreement. KLSM Inc. would like to make it easy to acquire a home. We would like to dispel the notion that rent is just "money down the drain". We believe that Rent-To-Own has benefits for all parties involved.
Here is our version of a Frequently Asked Questions section. The examples presented should answer most of your questions. This is the plain English version of the official legal contract. In our attempt to make this a truly win-win situation between KLSM, Inc. and our potential tenant/buyer, we would like the intent of the contract to be easily understood, and we would like the legalities of the contract to protect both parties.
The contract is written as a "Lease Agreement (with purchase option)". What this means is that you are officially a tenant of KLSM, Inc., until you make the last payment on your lease agreement. This is no different than when a bank provides a traditional mortgage: you don't really "own" the house until the bank is satisfied and you have made your last payment.
You make a one-time, non refundable down payment (which is the purchase of your option), and then pay your monthly rent. In other words, instead of paying a mortgage to the bank, you pay rent to KLSM, Inc. After your lease agreement is satisfied, you are the owner of your home.
How long is that agreement? It can be anywhere from 5 to 15 years -- you decide.
The amount of your rent per month includes principal on the loan, interest payments and all other closing costs. This monthly figure also includes property taxes, school taxes, county taxes, and insurance on the property.
This price does not include any recording fees and taxes due at the county clerk's office for legal transfer of ownership at the end of the term. If a fee is not listed as "included" you may assume that it is your responsibility.
Another rent-to-own web site summarized it this way:
"Now you may be thinking, 'OK, what's the catch? This sounds too good to be true.'
Some businesses have a reputation that they would evict a tenant with only a few payments left, on the thinnest of excuses. That tenant lost all rights to the property, and ended up in the same situation KLSM, Inc. is trying to avoid: rent = money down the drain. We will not do that to you. The only way you will get evicted is by doing damage to the house, not paying your rent or expenses, or by violating one of the terms of the agreement. This is a safety measure for KLSM, Inc., and it is your responsibility to make sure that this safety measure need never be implemented. If that safety measure does need to be implemented, please be aware that action will be swift and final.
Life does get in the way of the best laid plans. KLSM, Inc understands this, is willing to work with you if you need to get out of your agreement, and has planned an easy exit strategy for you. So, if for example there is a job transfer to another city, or a death, or a divorce, or any other event in your personal life which forces you to terminate your agreement, you can get out of your contract with KLSM, Inc. with just 30 days written notice. Of course, all of your expenses need to be paid to date, but there are no hidden/extra fees for the dissolution of the agreement. As with any rental agreement, the house needs to be in good repair and in clean condition upon vacating. As with any rental agreement, assuming no damage, your security deposit (one month's rent) will be returned. If there is damage, you will be billed. All fair. Agreed?
Maintenance is the responsibility of the tenant/buyer. You are now renting to own and homeownership requires maintenance. This includes things like broken windows from stones or baseballs, clogged drains, peeling paint, broken appliances, burnt out bulbs, lawn work/snow removal, etc.
Please keep in mind the following. If you were to get traditional bank financing, you would not call the bank loan officer in the middle of the night to report a stopped-up toilet. In the same way that you would not call the bank for minor maintenance problems, you will not call KLSM, Inc. to report problems with your house that any reasonable home owner would expect to happen; just fix the minor problem before it becomes a major problem, and life goes on.
Major problems with a house, like needing a new roof, are predictable items associated with home ownership. These expenses are also your responsibility, just as they would be if you used traditional expensive financing from a bank. Since KLSM, Inc. has a vested interest in the property during the length of our agreement, we will require that you call us and discuss the situation before doing any major repairs.
We may have suggestions for a specific contractor to contact, for better, speedier and less expensive repairs. We have found that there are a lot of contractors who are not worth the paper on which their business card is printed. Please use our contacts and contractors to make your life easier.
Please feel free to contact us with any questions or requests you may have. The more information you provide, the better we can meet your needs.
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