Lease-to-Own in Ohio (Lease Option)

[Kelly M.]

I have been doing lease-to-own contracts for a few years for a few houses. I now have 3 out on lease-to-own contracts. I had another, but they recently bought the house after only 1 year. So far, they have worked great for me. I have tried to make sure I get people who can actually perform. Of the 3 I now have, I really do believe that all will eventually buy the house. I know there are scammers out that that do it with people who have no ability to buy with the intent to do a "rinse and repeat" operation. I have only collected 3% or 4% in option consideration (the down payment).

However, I have had some warn me that they can be trouble. I know in Texas they are illegal, but where I do them in Ohio, they are fine. It is something about the recent Dodd-Frank legislation. I have a lawyer that see no issues, but also is not that knowledgeable in this area.

Can anyone on BP that knows the pit-falls of Lease-to-Own for the seller share with me what these are?

[Jeremy Davis]

pits falls in ohio are as fallows 

1) you let them pay off more then 20% of the purchase price of the house. if they own 20% or more you will have to foreclose on them as if you were a bank and that is a very long process here in ohio can take a year or even more of them living there for free!!!!!

2) If they live there longer then 3 years on the same lease to own contract again you will have to foreclose on them as if you were a bank.

3) if you come close to option 1 and 2 and you need to redraft a contract of these people you do not i repeat you do not use the exact same contract! you need to change everything the purchase price the down payment the dates everything! that way they can't go into court and say you are just extending the contract. 

I hope this helps.