The so called “rent to buy” contract is a new type of contract, whereby the landlord immediately transfers the possession and use of the property to the tenant (future buyer), with the obligation to pay the rent. In the contract the parties agree further, that at the end of the lease period, the tenant will either acquire the property, deducting the rent amount already paid, or dissolve the contract.
The proceeding can be divided in two phases: the use of the property, which is considered to be the basic element of the contract and the transfer of the ownership of the property, which consists only in a mere possibility in favor of the tenant.
The particularity consists in the previously mentioned possibility to choose in favor of the tenant after the conclusion of the lease period: he can decide to purchase the property (with a real right of purchase) or he can decide to dissolve the contract.
With the annotation in the real estate register of the lease-purchase contract (annotation in the land register) the tenant/potential buyer receives a valuable protection. Regarding the use of the property, the annotation can be held against third parties; regarding the possibility of purchasing the property, the annotation has a similar effect as the preliminary purchase agreement.
For these reasons, the advantages the parties can receive by agreeing on this type of contract are clear:
The owner/seller reserves the right of ownership until the total purchasing price is paid, with the peculiarity that the lease agreement is not subject to binding lease agreement rules. Nevertheless he receives an economic advantage, as the property purchase is postponed, simultaneously keeping the right to receive the agreed rent during this period.
The advantages for the buyer consist in the immediate availability of the property without any obligations, as he can decide at the agreed end of the lease, either to buy the property or to dissolve the contract.
THE ROLE OF THE NOTARY in the “rent to buy” contract
The economic proceeding is quite complex and requires a number of specific verifications to be carried out, in particular so that the will of the parties is respected and applied. The notary will assist and advise you, guaranteeing full access to this new contract model with maximum security.