Rent to Own Agreement Nova Scotia: A Comprehensive Guide
If you`re looking for a way to own a property in Nova Scotia but can`t afford to buy it outright, a rent to own agreement might be the perfect solution for you. This type of agreement allows you to rent a property with the option to buy it in the future. It`s an excellent option for those who want to invest in a property but aren`t ready to commit to a mortgage or down payment. In this article, we will discuss everything you need to know about rent to own agreement Nova Scotia.
What is a Rent to Own Agreement?
A rent to own agreement is a legal contract between a landlord and a tenant, which gives the tenant an option to purchase the property at a pre-determined price after a specified period. The tenant typically pays an option fee, followed by a monthly rent, part of which goes towards the purchase price if they decide to buy the property. The option fee and the rent to own portion are negotiable between the parties.
Benefits of Rent to Own Agreement
There are many benefits of entering into a rent to own agreement. Firstly, it allows you to rent a property with the option to buy it at a later date. Secondly, it gives you the time and opportunity to save for a down payment, which can be difficult to do while renting. Thirdly, it allows you to build your credit score, making it easier to qualify for a mortgage in the future. Finally, it allows you to try out the property before committing to a mortgage, giving you an opportunity to make sure it`s the right fit for you and your family.
Key Features of Rent to Own Agreement
Before entering into a rent to own agreement, there are some key features you need to be aware of. Firstly, the purchase price should be agreed upon at the beginning of the contract. Secondly, the length of the rent to own period should also be agreed upon. Typically, it`s between one and three years, but it can be longer if required. Thirdly, the monthly rent should be agreed upon, and a portion of it should go towards the purchase price if the tenant decides to buy the property. Finally, the option fee should be agreed upon, which is typically 3-5% of the purchase price.
Legal Requirements for Rent to Own Agreement
In Nova Scotia, there are some legal requirements for a rent to own agreement. Firstly, the agreement should be in writing and signed by both parties. Secondly, it should state the purchase price, the rent, the rent to own portion, the option fee, and the length of the rent to own period. Thirdly, it should state the conditions under which the tenant can opt-out of the agreement. Finally, it should comply with the Residential Tenancies Act.
Conclusion
A rent to own agreement can be an excellent way for those who want to become homeowners but aren`t ready to commit to a mortgage or down payment. It allows you to rent a property with the option to purchase it in the future, giving you time to save for a down payment and build your credit score. However, before entering into a rent to own agreement, it`s important to be aware of the key features and legal requirements. If you`re considering a rent to own agreement in Nova Scotia, it`s recommended to consult with a legal professional to ensure you`re fully informed and protected.