Free Maine Rent-to-Own Contract Template

Maine calls the installment version of this deal a land installment contract and gives it its own chapter of the property statutes.

Under 33 M.R.S. § 481(2) that means an agreement where the vendor agrees to sell an interest in property and the purchaser pays the price in five or more payments after any down payment, with the vendor keeping title as security. Section 481(3) limits it to improved Maine real property sold to be occupied as a dwelling.

Chapter 8 of Title 33 governs a Maine rent-to-own contract written as an installment purchase. Confirm the current text before relying on a date.

Two Copies, and a Twenty-Day Recording Deadline

Section 482(1) requires the contract to be executed in duplicate, with a copy provided to both the vendor and the purchaser.

Section 482(2) then puts a clock on it. Within twenty days after both parties have signed, the vendor must cause a copy of the contract, or a memorandum of it, to be recorded at the purchaser’s expense in the registry of deeds for the county where the property is located.

A memorandum must be titled “Memorandum of a Land Installment Contract” and give at minimum the parties’ names and signatures, a description of the property, and the applicable time periods. Anyone other than the parties may rely on the recorded materials.

Structuring Around the Chapter Is Prohibited

Section 483(1) is blunt. A person may not in bad faith attempt to avoid the chapter, including by subterfuge or by structuring a transaction to evade its provisions.

Obligations That Outlive a Foreclosure

Section 483(2) restricts promissory notes. A land installment contract may not require the purchaser to enter into a note or other obligation that survives foreclosure of their interest, nor may one be enforced, unless three conditions are met: the note’s term does not exceed the contract’s term, principal payments are credited to reduce the principal due on it, and after a foreclosure judgment and the redemption period the vendor conducts a sale in the manner required of a mortgagee, with the equity of redemption being sixty days.

Truth-in-Lending Can Do Some of the Work

Under section 482(3), disclosures made under the Maine Consumer Credit Code’s Truth-in-Lending article are deemed to comply with the financial disclosure items in subsection 1.

No, and Maine says so in the definition itself. Section 481(2) ends by excluding two things from the meaning of a land installment contract: option contracts for the purchase of real property, and purchase and sale agreements entered into with the good faith expectation of a separate transaction in which a third party or the seller finances the price in a single installment.

So an option-based rent-to-own sits outside Chapter 8, and the protections above do not reach it.

That is not the end of the story, because a different Maine statute goes the other way. The residential property disclosure subchapter at 33 M.R.S. § 172 applies to the transfer of any interest in residential real property, whether by sale, exchange, installment land contract, lease with an option to purchase, or any other option to purchase.

So Maine’s installment protections turn on structure, while its disclosure duty reaches the deal either way. Which applies to a given arrangement is a question for a Maine real estate attorney, since the bad faith provision means the label alone will not settle it.

Tip: The five-payment test is the hinge. An arrangement with four installments and a balloon is a different animal from one with sixty monthly payments, and Chapter 8 only reaches the second.

The sequence is short, and the deadline is the part people miss.

1. Decide whether the deal is an option or an installment purchase meeting the five-payment test.
2. Draft the contract with every item section 482(1) requires, including the statement that it is not a mortgage.
3. Execute it in duplicate and give a copy to each party.
4. Record the contract or a properly titled memorandum in the county registry of deeds within twenty days of the last signature.
5. Keep the recorded document with the signed set and the evidence of title.

Recording is at the purchaser’s expense, so agree who files it before the twenty days start running on your Maine rent-to-own contract.

Section 482(1) sets a minimum list, which makes this the most prescriptive part of a Maine rent-to-own contract. The items fall into four groups.

• The parties and the property — full names and post-office addresses of all parties, the date each signed, and a legal description of the property.
• The money — the sales price, any service charges stated separately, the down payment, the resulting principal balance, the amount and due date of each installment with the total number of payments, and the interest rate with the method of determining it.
• Title and encumbrances — a conspicuous statement of any encumbrances, including any pending public agency order or other matters of public record; evidence of title at execution and a description of the deed to be delivered if not a full warranty deed; and the purchaser’s right to pay on any mortgage the vendor defaults on and take credit.
• The warnings and rights — a statement that the contract is not a mortgage and that title does not pass until the price is paid in full, the buyer’s statutory right to cure a default, responsibility for taxes and assessments from the contract date unless agreed otherwise, the right to accelerate or prepay without penalty unless agreed otherwise, and a conspicuous acknowledgment of receipt above the purchaser’s signature.