In the aftermath of the foreclosure crisis, there has been a resurgence in predatory “rent-to-own” housing opportunities (a.k.a. contracts for deed or real estate installment contracts). These promise homeownership to people who generally are not in a financial position to buy a home though securing a mortgage. Housing Action Illinois is advocating for Senate Bill 885, a bill to establish consumer protections for people considering rent-to-own home purchases. The bill would help by:
- Requiring that the terms of the proposed contract be clear
- Prohibiting certain unfair contact terms
- Providing more protections and remedies for people who get into trouble with contract for deed agreements
At the moment, rent-to-own contracts are only minimally regulated under Illinois law and prone to contain misleading and/or unfair terms and conditions. Even worse, some sellers of rent-to-own homes have a business model based on predatory practices that churn a series of consumers through unsustainable agreements that quickly lead to default.
“While contract-for deed deals can be immensely profitable for the investors who have flocked to them, they rarely pan out for would-be home buyers,” Chicago Reader’s Rebecca Burns explains in a recent article exploring in detail how companies like Harbour Portfolio Advisors and Vision Property Management sell properties in poor physical condition at inflated sales prices with high interest rates. The sales pitches offer unrealistic promises of homeownership to families in neighborhoods that generally have high poverty rates and are racially segregated. The New York Times and the Chicago Sun-Times have also covered the ways that these predatory practices target vulnerable populations.
Help us fight back against interest groups who want to maintain the status quo. Complete the form below to contact your State Senator and ask them to vote in favor of Senate Bill 885 when it comes to a vote this April!