Monday, January 02, 2017

More On Rent-To-Own Ripoffs That Lure People w/ Crappy Credit & Desperate For Stable Housing Into Foreclosed Money Pits

In Pittsburgh, Pennsylvania, the Pittsburgh Post Gazette reports:
  • A North Braddock woman is fighting to stay in the home she thought she owned.

    Jacqueline Greene and her children live in a rent-to-own home, and after pouring thousands of dollars into the house to make it habitable, she could lose it after falling behind on rent payments.

    The property is owned by a limited liability company tied to Vision Property Management, a South Carolina-based firm that bills itself as the country’s largest provider of “affordable Lease-to-Own property opportunities.”
    ***
    The idea of rent to own can be be appealing to would-be homeowners who lack the resources to make a large down payment. But consumer advocates have criticized it as an arrangement that lacks the legal protections of either renting or home ownership, combined with the worst aspects of both, such as being responsible for major repairs while at the same time being vulnerable to eviction.

    Ms. Greene and another Vision client, David Turner of Wilkinsburg, have learned the drawbacks of such arrangements.

    Ms. Green said she and her boyfriend at the time paid thousands for costs that renters do not typically have to cover -- putting in a new toilet, a new bathtub, and having the fuse box fixed -- to make the house habitable.

    She believed she would own the home at the end of a seven-year period.

    “It said rent to own. That’s what attracted us to it,” Ms. Greene said.

    The repairs Ms. Greene made highlight one aspect of what advocates say are problematic about these agreements.

    Ms. Greene signed an “as is/​where is condition” lease, stating that she as the lessee was “solely responsible for maintaining the premises in a safe and non-hazardous condition... and for bringing the buildings and premises to a habitable condition,” according to court papers.

    After falling behind several months in her rent payments, Ms. Greene and two of her children are fighting to stay in the home.

    Ms. Greene's attorney, Eileen Yacknin, litigation director at Neighborhood Legal Services Association,(1) said she believes the agreement her client signed is really an installment land contract, which would provide her additional legal protections.

    However, if a court finds that it is a lease agreement, Ms. Yacknin said, then it is the landlord’s responsibility to maintain the home in a habitable condition.

    “My big concern is that the owners of these properties are deliberately taking advantage of the lack of knowledge that potential buyers or lessees have, which make them believe that they will be owning a home after seven years, when the owners of these properties know that is not the case. That's preying on people who are desperate to obtain stable housing and don't have the wherewithal to appreciate all the nuances that a complicated contract like this entails,” she said.
    ***
    David Turner, who has lived in a Wilkinsburg house owned by another Vision-linked company for about three years, said he was initially drawn to the house by the promise of affordable monthly payments -—only $340, he said he was told.

    “I have family that has seven children. So there wasn’t many places that would accommodate [us],” he explained. “If you don’t have good credit, it’s hard to get someone to accept you, even to rent... I was searching online and found Vision Property. And it seemed like a great thing, $340 a month, $400 down. And you’re like, ‘Wow.’ And then you go and it doesn't have a kitchen, and it doesn't have a ceiling. But if you could just get in, we could do all those things at $340 a month; you can afford to fix it.”

    But there were additional costs Mr. Turner said he did not become aware of until later.

    What they didn't explain to me...they don’t tell you that you are responsible for the back taxes, back water bill, back garbage tax. If I owned the house, the borough wouldn't let me get away with not paying the taxes, so how do they get to buy the house and not have to pay the taxes?”
    ***
    Ms. Greene still hopes to stay in her home, as does Mr. Turner.

    “Maybe we did get in over our heads,” said Ms. Greene, reflecting. “But it was under the assumption that [this] is an investment, at the end of it that at least we can say this is ours. But we can't say that, because it's theirs still.”
For the story, see Renting to own sounded good at first, but now 2 residents are finding flaws.

See generally, The New York Times: Housing That Ruins Your Finances and Your Health:
  • Of the nearly one million foreclosed houses sold by Fannie Mae, the government-run mortgage giant, since the housing bust, tens of thousands were decrepit, moldy and unfit for human habitation.

    Investor groups rounded them up anyway and turned them into cash cows by using “rent-to-own” leases or “contracts for deed.”
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(1) Neighborhood Legal Services Association is a non-profit, public interest law firm that provides free civil legal assistance in the area of poverty law to poor and vulnerable residents of Allegheny, Beaver, Butler and Lawrence Counties in Pennsylvania. land contract for deed

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