Alabama Rent-to-Own Lease Agreement

An Alabama rent-to-own agreement lets a tenant rent a property with the option to purchase during the lease. The tenant must follow state law and pay rent as agreed. The landlord, also the seller, should screen the tenant like any other before occupancy.

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Last updated November 27th, 2024

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An Alabama rent-to-own agreement lets a tenant rent a property with the option to purchase during the lease. The tenant must follow state law and pay rent as agreed. The landlord, also the seller, should screen the tenant like any other before occupancy.

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The Alabama Lease-to-Own Option to Purchase Agreement allows a tenant to lease a property with the option to buy it later. It sets out rent details, security deposits, late fees, and rules on occupancy, furnishings, utilities, and pets. The agreement covers maintenance, property access, and tenant rights if the landlord sells the property.

An attached addendum explains the purchase option, including the price, financing, inspection period, and what fixtures or personal property come with the sale. It follows Alabama law and includes rules on disputes, property safety, and lead paint disclosure, providing a clear outline for renting with a future purchase option.

Rental Application – This form is for tenants to fill out in order for landlords to verify tenants credit, finances, and employment history.

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What to Include in an Alabama Lease-to-Own Agreement?

In Alabama, a lease-to-own (or rent-to-own) agreement lets a tenant rent a property with the option to buy it later. This type of deal includes parts of the regular lease with a purchase contract. Here are the basics:

  • Lease Details: The agreement should lay out the lease length, monthly rent, payment dates, late fees, and who handles maintenance and repairs.
  • Purchase Option: This part gives the tenant the choice (but not the obligation) to buy the property. It should include the purchase price, when and how to exercise the option, and if any rent goes toward the purchase price.
  • Option Fee: Tenants often pay a non-refundable option fee to have the choice to buy in the future. The agreement should clearly state this fee and any terms around it.

Landlord-Tenant Laws, Terms, and Required Disclosures

  • Landlord-Tenant Laws: Lease-to-own agreements are still under Alabama’s landlord-tenant laws, like those in the Uniform Residential Landlord and Tenant Act. This covers rental agreements, tenant rights, and landlord duties.
  • Required Disclosures: Landlords have to follow state and federal disclosure laws. For example, if the property was built before 1978, they must provide a lead paint disclosure.
  • Review Contract Terms: It’s a good idea to have a lawyer review it to make sure it follows Alabama law and covers both sides properly.

Tips 💡

  • Legal Advice: Lease-to-own agreements can get complicated therefore it’s recommended to have a real estate attorney look over the contract or help draft it.
  • Understand the Financial Obligations: Tenants should be clear on any upfront fees, potential rent credits, and the future purchase price.
  • Keep Copies of Records: Hold onto all paperwork, communications, and agreements related to the lease-to-own deal.

Sample Alabama Rent-to-Own Lease Agreement