Title: Residential Rent to Own Protection Act
Policy area: Finance and Financial Sector

Summary:
Residential Rent to Own Protection Act
This bill establishes requirements regarding residential rent-to-own agreements. The bill
The Consumer Financial Protection Bureau must promulgate regulations under this bill.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 571 Introduced in Senate (IS)]

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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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Residential Rent to Own Protection 
Act''.

SEC. 2. REGULATION OF LAND CONTRACTS.

    (a) Definitions.--In this section:
            (1) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection.
            (2) Covered contract.--The term ``covered contract'' means 
        a land contract, contract for deed, agreement for deed, rent to 
        own contract, lease purchase, lease option, hybrid lease, or 
        other similar instrument related to a property located in a 
        State.
            (3) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, American Samoa, the Trust Territory of the 
        Pacific Islands, the United States Virgin Islands, the 
        Commonwealth of the Northern Mariana Islands, and any other 
        territory or possession of the United States.
    (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) of the Internal Revenue Code of 
        1986 for the 3-year period before the date on which the seller 
        enters into the covered contract;
            (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.
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