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Can I Fix Up My Rent-to-Own Home?

by | Apr 17, 2023 | Rent to Own, Renters

There are many pros and cons to signing a rent-to-own lease on a property, and it is something that you should not consider doing lightly. The complexity and variations of this type of contract are notorious for their pitfalls and clauses that can catch renters unawares. As stated elsewhere previously, you should seriously think about hiring a real estate agent and possibly even a real estate lawyer to help you navigate these tricky waters.

If you are confident that this is the right decision for you, however, one of the biggest questions that comes up is who is responsible (or even capable) of making repairs and renovations to the home while it is under a rent-to-own lease.

The short answer is: it depends.


The longer answer is… well, read on, dear reader.


Look in Your Lease


As we have already said, rent-to-own leases are known to be nuanced and not exactly straightforward in the way they are laid out. Just like with most questions that may arise about what you are and are not allowed to do comes down to the simple truth of what the language of the lease dictates.


If it isn’t in writing, then it isn’t supported on a legal basis.


Typically speaking, landlords who are willing to sign a rent-to-own lease on a home are not going to be too keen on spending money on fixing up that property. After all, they plan to sell it and the price has already been set as of the signing of the contract. So improvements will not increase the amount of money that they stand to gain from the eventual sale of the home.


For this reason, the majority of these kinds of leases include conditions that place the responsibility for all repairs and maintenance on the tenant. Rent-to-own contracts do vary from state to state, and some may dictate that the actual homeowner be responsible for repairs and upkeep. So do your homework before entering into such an agreement and do not simply assume this to be the case with your particular agreement.


Maintaining Your Future


On the surface, the tenant taking responsibility for all repairs and maintenance sounds like a reasonable agreement. Since the plan is for you to one day own this home, it only makes sense that you should be in charge of how it is fixed. You are, after all, investing in your future home. It should be done to your satisfaction and specifications.


You have the incentive to keep this home in good condition as well as to customize it to your personal tastes. When something needs to be replaced or redone, why not take that opportunity to make it bespoke to how you want that portion of the home to appear for the next five, ten, or twenty years? You might even take the opportunity to install higher-quality materials than a landlord would be willing to pay for.


Building a Brighter One

So yes, if your particular rent-to-own contract contains a lease option clause, and the language supporting it, then you absolutely can make improvements to the home. Without a lease option agreement, you likely would not be able to make these kinds of major changes.


If you are the responsible party for repairs and maintenance, then it only stands to reason that you should also be capable of renovating to your heart’s content. If your landlord tries to make it seem otherwise, you really should seek the advice of a real estate attorney.


The Rub


While all of this is true, there is an inherent risk in this logic. And that is because there is absolutely no guarantee that you will become the future owner of the house you are renting. The harsh reality is that when you have to replace the hot water tank or the roof, you are actually paying to replace these things on a piece of property that you do not yet own.


There are many reasons why the contract that you signed may not come to fruition. In most rent-to-own contracts, missing even a single payment could render it null and void. Something unexpected could occur with your finances, making the pending purchase of the home impossible. The current homeowner could not be paying what they owe on the home, causing it to enter foreclosure.


Any one of these things could mean that you would not only lose the home itself but also every bit of money that you have paid in rental credit and in repairs or improvements.


Before You Sign, Get an Inspection


For many of the same reasons that you would have a home inspection done on a house you were about to take out a mortgage loan on, you should positively hire a professional inspector for a rent-to-own home. Even if you may not ever exercise your option to buy the place, you should also have the premises appraised as well before you ever sign that dotted line.


The eventual cost of the home is typically agreed upon and locked in at the time that you sign your lease. Having an appraisal will make certain that you will be paying a fair price for the home, regardless of what the market may look like once that future sale arrives.


Having a thorough inspection done by a professional will bring attention to major repairs that will be needed, either right away or in the near future. While unforeseen surprises can always crop up, it is always worth protecting yourself from signing a lease on a potential money pit.

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