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A North Carolina rent-to-own agreement is a real estate contract used to establish a tenancy arrangement between a landlord and a tenant with an added stipulation that the tenant may purchase the property after a certain period of time has elapsed. The tenant will pay monthly rent to the landlord, with a portion of the payment typically credited towards the purchase price at closing.
In addition to the monthly rent, the landlord will demand an option fee, which is a down payment that secures the tenant’s right to eventually buy the property. When it comes time to purchase the property, the tenant may or may not exercise their purchase option; however, the consideration and all rent payments are non-refundable.
Rental Laws – Chapter 42 (Landlord and Tenant)
Purchase Agreement Laws – Chapter 47E (Residential Property Disclosure Act) and Chapter 47B (Real Property Marketable Title Act)
Rent-to-Own Agreement Laws – Chapter 47G (Option To Purchase Contracts Executed with Lease Agreements)
Disclosures (3) |
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The landlord cannot charge fees for unpaid rent unless such fees are disclosed in the lease and are consistent with the limits prescribed by law.
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2) Lead-Based Paint Disclosure If the rental property was built pre-1978, the landlord must distribute this disclosure of lead paint information to the tenants and obtain their signatures on the document.
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3) Security Deposit Disclosure The landlord must disclose to the tenant the name and address of the financial institution where their security deposit is held or, if the deposit is retained as a bond, the name of the insurance company that issued the bond. This disclosure must be made within thirty (30) days of the lease commencement date.
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