II 

116TH CONGRESS 

1ST SESSION S. 571 

To provide the Bureau of Consumer Financial Protection with the authority 

to regulate land contracts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 26, 2019 

Mr. MERKLEY (for himself and Ms. SMITH) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide the Bureau of Consumer Financial Protection 

with the authority to regulate land contracts, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Residential Rent to 

5 Own Protection Act’’. 

6 SEC. 2. REGULATION OF LAND CONTRACTS. 

7 (a) DEFINITIONS.—In this section: 

8 (1) BUREAU.—The term ‘‘Bureau’’ means the 

9 Bureau of Consumer Financial Protection. 


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1 (2) COVERED CONTRACT.—The term ‘‘covered 

2 contract’’ means a land contract, contract for deed, 

3 agreement for deed, rent to own contract, lease pur4 chase, lease option, hybrid lease, or other similar in5 strument related to a property located in a State. 

6 (3) STATE.—The term ‘‘State’’ means any 

7 State of the United States, the District of Columbia, 

8 the Commonwealth of Puerto Rico, Guam, American 

9 Samoa, the Trust Territory of the Pacific Islands, 

10 the United States Virgin Islands, the Commonwealth 

11 of the Northern Mariana Islands, and any other ter12 ritory or possession of the United States. 

13 (b) RENTAL HABITABILITY REQUIREMENT.— 

14 (1) IN GENERAL.—Any property that is the 

15 subject of a covered contract shall be maintained in 

16 a habitable state, as determined by applicable State 

17 and local habitability requirements, by the seller of 

18 the property at all times until the purchaser of the 

19 property— 

20 (A) has fully paid the obligations of the 

21 purchaser under the covered contract; and 

22 (B) obtains title to the property. 

23 (2) REFUND REMEDY.—If a property that is 

24 the subject of a covered contract does not comply 

25 with paragraph (1)— 


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1 (A) the fair rental value of the property 

2 shall be deemed to be zero; and 

3 (B) the purchaser of the property shall be 

4 entitled to a refund from the seller of all 

5 amounts paid pursuant to the covered contract 

6 for the period during which the property was 

7 not habitable. 

8 (c) RELIEF TO SELLER ONLY AVAILABLE THROUGH

9 A JUDICIAL PROCEEDING.—Notwithstanding any other 

10 provision of law, the seller in a covered contract may ter11 minate the purchaser’s right to purchase the property that 

12 is the subject of the covered contract or right of possession 

13 only upon determination by a court of competent jurisdic14 tion that the purchaser is in material breach of the con15 tract. 

16 (d) PROHIBITION ON EVICTION OR EJECTMENT.— 

17 (1) IN GENERAL.—Except as may be ordered in 

18 a judicial proceeding, the purchaser in a covered 

19 contract may not be evicted or otherwise ejected 

20 from the property that is the subject of the covered 

21 contract. 

22 (2) DAMAGES.— 

23 (A) IN GENERAL.—A purchaser with re24 spect to a covered contract that is terminated 

25 through a judicial proceeding may bring a claim 


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1 or counterclaim to enforce a violation of para2 graph (1) in a civil proceeding. 

3 (B) AMOUNT.—If a purchaser described in 

4 subparagraph (A) is the prevailing party, the 

5 court shall award actual damages and attor6 ney’s fees to the purchaser. 

7 (e) RECORDING.—Not later than 45 days after the 

8 date on which a covered contract is signed, the seller in 

9 the covered contract shall record the covered contract in 

10 the applicable local governmental office that records land 

11 records. 

12 (f) STATE LAWS.—Nothing in this section shall be 

13 construed to annul, alter, or affect any provision of State 

14 law if the protection that the provision of State law pro15 vides to purchasers in covered contracts is greater than 

16 the protection provided to those purchasers under this sec17 tion. 

18 (g) APPLICATION.—This section shall not apply to a 

19 covered contract if— 

20 (1) the seller in the covered contract is a person 

21 described in section 501(c)(3) of the Internal Rev22 enue Code of 1986 for the 3-year period before the 

23 date on which the seller enters into the covered con24 tract; 


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1 (2) the sale price is not higher than the amount 

2 the seller paid for the property that is the subject 

3 of the covered contract; and 

4 (3) no interest is charged. 

5 (h) CIVIL PENALTY.—A seller with respect to a cov6 ered contract that violates the requirements of this section 

7 shall be liable to the purchaser in the covered contract in 

8 an amount equal to— 

9 (1) the greater of— 

10 (A) the actual damage caused to the pur11 chaser by reason of the violation; and 

12 (B) $10,000; and 

13 (2) the costs of any civil action and attorney’s 

14 fees. 

15 (i) REGULATIONS.—Not later than 1 year after the 

16 date of enactment of this Act, the Bureau shall promul17 gate regulations to carry out this section. 

18 (j) GAO STUDY.—Not later than 1 year after the 

19 date of enactment of this Act, the Comptroller General 

20 of the United States shall conduct a study and submit to 

21 Congress a report on— 

22 (1) the size and scope of the covered contract 

23 market; and 


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1 (2) the predatory practices occurring within the 

2 covered contract market. 

Æ 


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