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State Representative Joe Mullery
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4262
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CONSUMER PROTECTION: CONTRACT FOR DEED/RENT-TO-OWN LEGISLATION
I’m the chief House author of a bill that would provide protections for buyers on contracts for deed agreements, as well as rent-to-own real estate transactions.
Even many attorneys don’t understand these complicated documents. Because of the present lack of workforce housing, many schemes have popped up, which rip-off unsophisticated home purchasers. Buyers often are not aware that they won’t receive the protections of a mortgage.
The measure would require important disclosures 10 days before signing a contract for deed or purchase agreement or entering into an option agreement. Regarding contracts for deed, potential buyers are warned of unusual provisions such as a duty to maintain insurance on the structure even though they don’t own the house. The bill exempts sellers who only sell one house per year involving contract for deed.
For rent-to-own deals, the bill would provide a right to cure nonpayment of rent. It also maintains the rights of renters under law until they get ownership status.
Buyers need to know the legal consequences before they sign on the dotted line.
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