3. What are the terms of rent-to-own? Isa Isip-de Jesus, a Real Estate Broker from Greenmovers Group, says, “The terms of rent-to-own should be clear to both parties to avoid legal conflicts in the future. The buyer and seller should be aware of the The Rental Reform Act of 2002, to avoid violations in the terms of the rent-to-own contracts.”
4. Can I adjust the payment scheme so I can easily afford it? De Jesus says, “Most rent-to-own properties have higher rates than mortgage, so you end up spending more for property.” So, take a good hard look at your finances first. The monthly payment you’ll be making must be an extra amount that you already have every month. Don’t think that you can magically save or scour up the cash every month if you don’t already have those saving skills in place prior to your purchase. Stanley, a lawyer who is doing a rent-to-own payment option for a condominium unit in BGC, chose to do so because of its good value for money. “The unit was offered with 0% interest. The total purchase price was merely divided by 120 months, equivalent to 10 years.”
Jan adds that they opted for the rent-to-own because of their cash flow. “It was a manageable risk to take, until we were ready. We also bought it early in our careers, thus our credit standing was not so good yet. Ask also if in the event that your bank loan is not enough, if the broker will be willing to extend the monthly installment portion.”
5. Can I renovate or improve the property? If the property is still being built, ask if you can change the layout according to your preference—maybe make the bedroom bigger, or break down a wall?
6. What maintenance measures are taken in the property? For those looking into living in a condominium, keeping your unit safe from fire or flooding is a shared responsibility between the homeowner and the building administration—make sure to exercise your right as a homeowner and ask for the repairs you need. Jan says, “In hindsight, one of the questions I should have asked my agent was how often will the admin or developer do waterproofing. I realized waterproofing is not a one-time thing, because the building moves so there is much wear and tear.
7. Are there other fees that need to be paid at the end of the lease period? Stanley says to take note also of the conversion fee that’s payable at the end of your lease period, in order to transfer the property to the name of the rent-to-own homeowner.
8. What paperwork or legal documents need to be turned over to you once the lease is done? Remember to keep all your official receipts for the payments you’ll be making throughout the payment period, and most importantly, your Transfer Certificate of Title or TCT, must be under your name.
