Lauren wasn’t exactly a renter, but she wasn’t a homeowner either. When she received an eviction notice, she called Lone Star Legal Aid. It was 2021, and she was five years into a six-year, rent-to-own contract. In other words, Lauren bought her house directly from the seller. No bank, no mortgage, no middle-man. The owner drew up a contract and Lauren agreed to make 72 payments over six years. The contract stated: “When this contract has reached its end, the deed… will be given.” The interest rate was 6.5%, which wasn’t too high, but the terms were still risky. To put things into perspective, Lauren and her husband would lose everything if they were even 10 days late on a single payment. Thankfully, they never slipped up.
After making at least 55 of the 72 payments, Lauren found an envelope labeled “Return to Sender” in her mailbox. It was the monthly house payment she had sent to the seller. Lauren contacted the seller, arranged to leave a money order at the post office, but the landlord never picked it up. Eventually, Lauren received a handwritten Notice to Vacate. At this point, she was divorced with two children – and she had ten days to pack up and leave the house behind.
When attorney Donna Owen reviewed the case, she saw a solution. Though tenants can be evicted, Lauren wasn’t technically a tenant. She was renting to own. The difference: Lauren had a written contract and an ownership interest in the home. On the day Lauren was scheduled to appear in court, Owen accompanied her, explaining the situation to the Justice Court Judge. The judge listened and agreed. She’s not a tenant. She can’t be evicted. The judge ruled in Lauren’s favor.
Though LSLA’s attorney averted the immediate threat – eviction – Lauren’s situation soon ballooned into a multi-year legal saga. The seller, who had already sold and repossessed this same piece of property once before, was apparently determined to do it again. The seller appealed to a higher court, but the case lingered. First, because the seller’s lawyer had a major surgery and later, because that attorney filed a motion to withdraw. Lauren’s payments kept getting returned, and at some point, the seller filed another eviction! Again, LSLA attorney Donna Owen went to the Justice Court and explained the situation to the judge. Once again, the judge dismissed the eviction.
Ms. Owen worked with Lauren to sift through her records. “She had all of this information. Sometimes it would be wadded up. Sometimes it would have stains all over it, but when we’d meet, she’d bring me this big pile of stuff and we’d go through it and try to piece it together. Eventually, we figured out she’s paid for this property in full.”
Ms. Owen walked Lauren through the process of filing her rent-to-own contract with the county clerk. Normally when you buy a house, you’re not responsible for filing records with the county. The title company does it. But with an informal agreement like this one, it’s up to the buyer or seller to record the agreement with county officials. And if the agreement isn’t publicly recorded, there could be a dispute between versions, or the original contract could get lost, or any number of problems could arise.
In Lauren’s case, it seems the seller has given up on their effort to take back the property. What can you do when you’ve held up your end of the contract, but the landlord refuses your last few payments? Talk to an attorney. The law is complicated, but you have rights. Just because a seller wants their house back, doesn’t mean you have to give it back.
If you or someone you know is caught in a difficult situation with a rent-to-own home, we encourage you to apply for assistance online at www.lonestarlegal.org/get-help or by phone at 1-800-733-8394.
Names have been changed to protect the identity of the client(s).
Lone Star Legal Aid (LSLA) is a 501(c)(3) nonprofit law firm focused on advocacy for low-income and underserved populations by providing free legal education, advice, and representation. LSLA serves millions of people at 125% of federal poverty guidelines, who live in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties in Southwest Arkansas. LSLA focuses its resources on maintaining, enhancing, and protecting income and economic stability; preserving housing; improving outcomes for children; establishing and sustaining family safety, stability, health, and wellbeing; and assisting populations with special vulnerabilities, like those with disabilities, the aging, survivors of crime and disasters, the unemployed and underemployed, the unhoused, those with limited English language skills, and the LGBTQIA+ community. To learn more about Lone Star Legal Aid, visit our website at www.LoneStarLegal.org.
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