However, it is possible to insert in the contract that the fees paid for the “use” can be reduced in whole or in part from the price. This leverage can be used to incentivize the exercise of the right to purchase in the early years https://www.texassellmyhouse.com/sell-my-house-fast-live-oak-tx/
Example of incentive purchase right – contract duration 6 years:
– exercise in the 1st or 2nd year: price reduction equal to 100% of the rental fees paid
– exercise in the 3rd or 4th year: price reduction equal to 50% of the rental fees paid
– exercise in the 5th or 6th year: no price deduction.
What happens if the lessee does not exercise the right to purchase
If the lessee/purchaser decides not to exercise his right to purchase, the contract will cease to have any effect upon expiry of the term. The tenant must return the property to the seller, who fully acquires the rents received as “use” while he will have to return the rents received as an “advance price”. This is a significant difference compared to a preliminary sale, where there is an obligation to purchase on the part of the promissory buyer: the deposit and advances paid are retained by the seller in the event that the buyer does not proceed with the purchase .
However, in the event of breach of contract by the tenant (e.g. non-payment of rent), the seller may withhold the deposit and subsequent advances paid up to then, unless otherwise agreed between the parties more favorable to the tenant.
What happens if the grantor/owner does not fulfill the stipulation of the transfer deed
The grantor/owner has the obligation to proceed with the transfer of the property if the lessee intends to exercise his right to purchase, in compliance with the agreed terms.
If he does not fulfill the stipulation obligation, the lessee can proceed through the Court with a privileged lane to obtain a sentence that sanctions the transfer of the property. Rent to buy contracts must take the form of a public deed or authenticated private deed , which allows transcription.
