MORGANTOWN, WEST VIRGINIA — Some families who lost their homes in the flooding that
devastated southern West Virginia last summer are facing another housing disaster:
In an effort to rebuild their lives, many flood victims are being enticed to rent houses that have a purchase option at the end of the lease, according to Priya Baskaran , director of the Entrepreneurship and Innovation Law Clinic (EILC) at the West Virginia University College of Law.
“Rent-to-own situations have been cheating families into believing they are buying their home,” she said.
According to Baskaran, rent-to-own agreements are marketed to families who do not qualify for traditional home loans because of income requirements, poor credit or because they can’t afford the down payment.
Baskaran explains that rent-to-own arrangements lack the protection of home purchase agreements and they are written to deny protection under West Virginia’s landlord-tenant laws. As a result, traditional landlord duties such as repairing roofs or bathrooms become the renter’s responsibility.
“The properties are not professionally inspected to make sure there is no black mold, asbestos, or broken heating systems, for example. The tenant’s down payment and monthly payments are not subject to Truth in Lending laws, and no bank ensures that the property has good title,” she said.
Baskaran and law students in the EILC have been researching rent-to-own situations in Rainelle, West Virginia, where some victims have been forced by landlords to spend their FEMA recovery funds to repair homes they don’t actually own.
In some instances, families have been evicted from their rent-to-own homes by the landlord after expensive repairs have been made.
Rainelle city leaders are particularly concerned about speculators purchasing properties after the flood in order to lure more victims into bad rent-to-own agreements, according to Baskaran.
“With no inspection and significant damage to housing stock, these new families could unknowingly move into dangerous situations,” she said.
To combat the rent-to-own scams, the EILC is creating a series of “know your rights” educational materials to raise awareness about the potential dangers and answer common questions faced by families trapped in bad property leases. The materials will be distributed to residents as part of Greenbrier County’s long-term recovery efforts.