Renting to own sounded good at first, but now 2 residents are finding flaws
December 28, 2016 12:09 AM
David Turner uses his cell phone to try to secure a place for his family to live. He was told he had to vacate his current home in a few days, so his family had begun packing for the move. Mr. Turner later learned his family would be able to stay in the house for the time being.
David Turner remodeled the kitchen in his Wilkinsburg home himself. Now he worries that he will be evicted because of costs he says he was unaware of when he moved into the rent-to-own property.
By Kate Giammarise / Pittsburgh Post-Gazette
A North Braddock woman is fighting to stay in the home she thought she owned.
Jacqueline Greene and her children live in a rent-to-own home, and after pouring thousands of dollars into the house to make it habitable, she could lose it after falling behind on rent payments.
The property is owned by a limited liability company tied to Vision Property Management, a South Carolina-based firm that bills itself as the country’s largest provider of “affordable Lease-to-Own property opportunities.”
In November, a woman whose problems with a rent-to-own home were detailed by the Post-Gazette filed a complaint with the state attorney general’s office, alleging deceptive business practices by a limited liability company also tied to Vision.
The idea of rent to own can be be appealing to would-be homeowners who lack the resources to make a large down payment. But consumer advocates have criticized it as an arrangement that lacks the legal protections of either renting or home ownership, combined with the worst aspects of both, such as being responsible for major repairs while at the same time being vulnerable to eviction.
Ms. Greene and another Vision client, David Turner of Wilkinsburg, have learned the drawbacks of such arrangements.
Ms. Green said she and her boyfriend at the time paid thousands for costs that renters do not typically have to cover — putting in a new toilet, a new bathtub, and having the fuse box fixed — to make the house habitable.
She believed she would own the home at the end of a seven-year period.
“It said rent to own. That’s what attracted us to it,” Ms. Greene said.
The repairs Ms. Greene made highlight one aspect of what advocates say are problematic about these agreements.
Ms. Greene signed an “as is/where is condition” lease, stating that she as the lessee was “solely responsible for maintaining the premises in a safe and non-hazardous condition … and for bringing the buildings and premises to a habitable condition,” according to court papers.
David Turner sits on a stairway in his Wilkinsburg home. “If I owned the house, the borough wouldn't let me get away with not paying the taxes, so how do they get to buy the house and not have to pay the taxes?” (Steve Mellon/Post-Gazette)
After falling behind several months in her rent payments, Ms. Greene and two of her children are fighting to stay in the home.
Ms. Greene’s attorney, Eileen Yacknin, litigation director at Neighborhood Legal Services Association, said she believes the agreement her client signed is really an installment land contract, which would provide her additional legal protections.
However, if a court finds that it is a lease agreement, Ms. Yacknin said, then it is the landlord’s responsibility to maintain the home in a habitable condition.
“My big concern is that the owners of these properties are deliberately taking advantage of the lack of knowledge that potential buyers or lessees have, which make them believe that they will be owning a home after seven years, when the owners of these properties know that is not the case. That’s preying on people who are desperate to obtain stable housing and don’t have the wherewithal to appreciate all the nuances that a complicated contract like this entails,” she said.
Vision’s web site says it specializes in assisting those who might not qualify for a conventional mortgage.
In a statement, the company said it “work[s] extensively with our customers to try and provide options to them should they fall behind. We offer payment arrangements, contract re-structures, and other loss-mitigation efforts to try and help the customer stay in the home. Our intention is not to immediately evict a tenant once they fall behind, our goal is to find the best solution for them and us so that the option of home ownership is still available to them. We understand unforeseen circumstances and we try to accommodate the unique situations customers face following the signing of the lease agreement.”
David Turner, who has lived in a Wilkinsburg house owned by another Vision-linked company for about three years, said he was initially drawn to the house by the promise of affordable monthly payments — only $340, he said he was told.
“I have family that has seven children. So there wasn’t many places that would accommodate [us],” he explained. “If you don’t have good credit, it’s hard to get someone to accept you, even to rent … I was searching online and found Vision Property. And it seemed like a great thing, $340 a month, $400 down. And you’re like, ‘Wow.’ And then you go and it doesn’t have a kitchen, and it doesn’t have a ceiling. But if you could just get in, we could do all those things at $340 a month; you can afford to fix it.”
But there were additional costs Mr. Turner said he did not become aware of until later.
“What they didn’t explain to me … they don’t tell you that you are responsible for the back taxes, back water bill, back garbage tax. If I owned the house, the borough wouldn’t let me get away with not paying the taxes, so how do they get to buy the house and not have to pay the taxes?”
County real estate records show the property was sold in 2011 to the Federal National Mortgage Association — commonly known as Fannie Mae, the government-backed lender — for $1,560. It was sold again in 2012 for $5,850 to RV Holdings Eleven LLC — one of many limited liability companies tied to Vision. In 2014, it was sold again, to another Vision-linked LLC, ACM Vision V LLC, for $16,127.
Based on county property and court records, there are an array of LLCs that appear to be tied to Vision, with names like Kaja Holdings LLC, Kaja Holdings 2 LLC, RVFM 11 Series LLC, Bat Holdings One LLC, Bat Holdings Two LLC, Bat Holdings Five LLC and others.
Ten properties owned by these LLCs are tax-delinquent, said Michael McCabe, solicitor for the Allegheny County Treasurer’s Office, with $7,261.44 owed to the county.
A statement from Vision said, in a review, “we identified a gap in an operational process that affected the tax payments on a handful of properties and have already taken the necessary steps to correct this with the county.”
The attorney general’s office said it could neither confirm nor deny that an investigation has begun, said spokesman Chuck Ardo.
However, he said, “We would encourage anybody with complaints to file them with our office.”
Ms. Greene still hopes to stay in her home, as does Mr. Turner.
“Maybe we did get in over our heads,” said Ms. Greene, reflecting. “But it was under the assumption that [this] is an investment, at the end of it that at least we can say this is ours. But we can’t say that, because it’s theirs still.”
Kate Giammarise: email@example.com or 412-263-3909 or on Twitter @KateGiammarise.
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