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No-Transfer Rentals

Posted August 10th, 2009 under pitfalls, smart selling.

When money is tight and a homeowner is faced with replacing an air conditioner, water tank, or furnace, they will often opt to rent the new one instead of buying.

If you choose to rent, read the contract carefully to check for a “no-transfer” clause. When you sell your home, any rental contracts containing such a clause will need to be bought out, as they cannot be transferred to the incoming owner. You may be forced to pay the remaining time on the contract, which can be a lump sum of hundreds or even thousands of dollars.

So, if you're considering moving in the near future, check your existing contracts so you don't receive any nasty surprises. And if you're preparing to sign a new rental contract, always check the fine print!

Got a question about rental contracts? Just ask me, I'll be happy to help.