If a homeowner lists their property as “lease to own”, are they considered a “seller” and required to disclose property information to the future buyer?

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If a homeowner lists their property as “lease to own”, are they considered a “seller” and required to disclose property information to the future buyer?

When is the homeowner required to disclose legal information (seller property disclosure statement) to the future buyer: at the time of the lease-to-own contract or; when the contract expires and, before the prospective buyer secures a home loan. If the seller doesn’t disclose information, that would help the prospective buyer in deciding whether, or on what terms to purchase the property and the prospective buyer enters into a contract and determines information was not disclosed, which would have effected their decision to enter into the lease-to-own contract, can the prospective buyer sue?

Asked on November 8, 2011 under Real Estate Law, Kansas

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Good question. In a lease to own situation, the landlord of a piece of real property does not have to submit the transfer disclosure statement or any other required documentation until the tenant exercises the option to purchase the parcel.

Many times the tenant in a lease to own situation actually lives in the rental and has the opportunity to make his or her own inspections on their own at their leisure or retain a third party expert on many occasions to look at the struture as to its integrity.

If the seller does not submit the required transfer disclosure statement and any supplement after the option to purchase is exercised by the tenant, the tenant has the option of cancelling the purchase without any recourse. Good luck.


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