Furniture Rent-to-Own Scams Give Lease Options a Bad Rap

Rent-to-own scams are now running rampant in the furniture market. Those who are unable to purchase the furniture they need outright or on credit are convinced to sign rental agreements for their furniture. Some see it as an opportunity, but most feel it is simply their only option to get the furniture they need to live comfortably. By the end of the lease purchase agreement, they end up paying double or triple what they would have paid for the same furniture with a straight purchase.

Lease option homes are often considered rent-to-own frauds as well, but their agreements are actually very different. Renters are given the option to make rent payments over time just as with furniture rent-to-own agreements, but in the end, these renters are able to purchase the home with a down payment already saved up. Every monthly payment they make has a built-in deposit to their eventual down payment. It is a savings plan and a rental agreement wrapped in one convenient package.

While there are many rent-to-own complaints by victims of rent-to-own scams in the furniture industry, not as many people end up filing a rent-to-own complaint after signing into a lease option deal for a home. They typically see the opportunity in front of them and recognize the risks before entering the deal. The option is not something they are forced into doing, since they could very well find another home to rent without the lease option on the line.

So, what are the potential downfalls to signing into a lease option agreement? The biggest risk is losing your down payment money if you decide not to purchase the home when your lease term is up. These agreements are very specific, and you have to know your terms and protect yourself along the way. Specifically, look for the following clauses:

1. If you miss a monthly payment or are late on a payment, you could forfeit the portion of your payment typically going to save for your down payment. The agreement could eventually void if you miss or are late too many times.

2. If you are unable or unwilling to buy the house within a given time frame at the end of your lease agreement, you lose all money saved up for your down payment. You only get that money if you buy the specific house you are renting at the end of the lease.

Keep these risks in mind as you consider a lease option home, but understand that these deals are not rent-to-own scams!