Caveat emptor, warn rent-to-own landlords

This story was interesting… it’s written from the perspective of the owners of a property but there’s a few important things to point out.

First this section here:

The fault ultimately lies with the fact that the correct paperwork wasn’t in order. As nothing was signed, Lam is not officially a tenant, and the Residential Tenancy Branch has refused to intervene.

“The law should be on our side, but we were told she is not a tenant” explains Maxine. “We have no tenancy agreement with her. We’re now going to have to get bailiffs to get her out at some point … and that’s going to cost us more money.”

Based on what I could read it seems like the homeowner entered into an agreement with someone (often called a sandwich lease option) and they found a tenant. But they didn’t pay the homeowner anything and essentially pocketed any money paid by the tenant they found.

That’s why it’s important that you do your due¬†diligence¬†when looking to do an owner financed deal, especially a rent to own. I cover sandwich lease options pretty extensively in the How to Buy Owner Financed Package you find on this site.

The story of homeowers who participated in an RTO project in Calgary has made national headlines, and not in a good way. Terry and Maxine Henry moved to Alberta for work and participated in a rent-to-own scheme organized by Kelowna Home Deals, but haven’t received any money from their tenants/buyers. This option could be transferred to a buyer, which Burnett said he found in October in tenant Carlotta Lam.

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