The Maine legislature recently passed a bill that focuses on adding certain protections and requirements around option contracts for the purchase of real property or rent-to-own real property.
Among other provisions, the new bill creates certain requirements for the contracts, listing elements that must be included in such a written contract (e.g., that in the event the option contract is not exercised, the owner of the property must return any initial payment from the start of the option contract that was over certain amounts specified in the law). The bill also includes certain recordation requirements after the option contract for the purchase of real property or rent-to-own real property has been signed by both parties, and requirements for the termination of such a contract, defining when the eviction or foreclosure process is applicable for these arrangements.
The bill further states that the owner of the property that is the subject of the option contract for purchase, or rent-to-own agreement, is considered a “creditor” under the Maine Consumer Credit Code, although there is an exemption for owners with a low volume of transactions.
Moreover, the bill adds provisions regarding prohibited acts related to land installment contracts (including limitations on obligations surviving foreclosure) and mediation terms related to certain foreclosure proceedings.
The bill will take effect on October 18, 2021.