Residential Rent to Own Protection Act

To provide the Bureau of Consumer Financial Protection with the authority to regulate land contracts, and for other purposes. 1. Short title This Act may be cited as the Residential Rent to Own Protection Act 2. Regulation of land contracts (a) Definitions In this section: (1) Bureau The term Bureau (2) Covered contract The term covered contract (3) State The term State (b) Rental habitability requirement (1) In general Any property that is the subject of a covered contract shall be maintained in a habitable state, as determined by applicable State and local habitability requirements, by the seller of the property at all times until the purchaser of the property— (A) has fully paid the obligations of the purchaser under the covered contract; and (B) obtains title to the property. (2) Refund remedy If a property that is the subject of a covered contract does not comply with paragraph (1)— (A) the fair rental value of the property shall be deemed to be zero; and (B) the purchaser of the property shall be entitled to a refund from the seller of all amounts paid pursuant to the covered contract for the period during which the property was not habitable. (c) Relief to seller only available through a judicial proceeding Notwithstanding any other provision of law, the seller in a covered contract may terminate the purchaser’s right to purchase the property that is the subject of the covered contract or right of possession only upon determination by a court of competent jurisdiction that the purchaser is in material breach of the contract. (d) Prohibition on eviction or ejectment (1) In general Except as may be ordered in a judicial proceeding, the purchaser in a covered contract may not be evicted or otherwise ejected from the property that is the subject of the covered contract. (2) Damages (A) In general A purchaser with respect to a covered contract that is terminated through a judicial proceeding may bring a claim or counterclaim to enforce a violation of paragraph (1) in a civil proceeding. (B) Amount If a purchaser described in subparagraph (A) is the prevailing party, the court shall award actual damages and attorney's fees to the purchaser. (e) Recording Not later than 45 days after the date on which a covered contract is signed, the seller in the covered contract shall record the covered contract in the applicable local governmental office that records land records. (f) State laws Nothing in this section shall be construed to annul, alter, or affect any provision of State law if the protection that the provision of State law provides to purchasers in covered contracts is greater than the protection provided to those purchasers under this section. (g) Application This section shall not apply to a covered contract if— (1) the seller in the covered contract is a person described in section 501(c)(3) (2) the sale price is not higher than the amount the seller paid for the property that is the subject of the covered contract; and (3) no interest is charged. (h) Civil penalty A seller with respect to a covered contract that violates the requirements of this section shall be liable to the purchaser in the covered contract in an amount equal to— (1) the greater of— (A) the actual damage caused to the purchaser by reason of the violation; and (B) $10,000; and (2) the costs of any civil action and attorney’s fees. (i) Regulations Not later than 1 year after the date of enactment of this Act, the Bureau shall promulgate regulations to carry out this section. (j) GAO study Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study and submit to Congress a report on— (1) the size and scope of the covered contract market; and (2) the predatory practices occurring within the covered contract market.

Summary: Residential Rent to Own Protection Act This bill establishes requirements regarding residential rent-to-own agreements. The bill requires residential property subject to rent-to-own agreements to comply with applicable state and local habitability laws, prohibits eviction of a purchaser of such an agreement except if ordered in a judicial proceeding, requires public documentation of these agreements, and establishes civil penalties for violations. The Consumer Financial Protection Bureau must promulgate regulations under this bill.