Rent To Own Furniture Laws In Texas
When it comes to furnishing your home, buying furniture outright can be an expensive endeavor. Renting to own furniture is a popular option for those who cannot afford to pay for everything upfront. However, before you enter into a rent-to-own agreement, it is essential to understand the laws surrounding rent-to-own furniture in Texas.
Rent-To-Own Agreement
A rent-to-own agreement is a contract between a tenant and a landlord or furniture store. It allows the tenant to rent the furniture for a specified period, with the option to purchase the furniture at the end of the lease term. The agreement typically includes the rental rate, the length of the rental term, and the purchase price of the furniture.
In Texas, rent-to-own agreements are governed by the Texas Property Code. According to the code, a rent-to-own agreement must be in writing and signed by both parties. The agreement must also include the following information:
- The total cost of the furniture
- The amount of each payment
- The number of payments required to own the furniture
- The consequences of default
- The rights of the tenant to terminate the agreement
If any of the above information is missing from the agreement, it may be considered invalid under Texas law.
Rent-To-Own Furniture Sales Tax
When you purchase furniture outright in Texas, you are required to pay a sales tax of 6.25%. However, the sales tax for rent-to-own furniture is different. According to Texas law, sales tax is only required on the rental payments, not on the purchase price of the furniture.
For example, if you rent a piece of furniture for $100 per month for 12 months, you would pay sales tax on each of the 12 monthly payments, but not on the purchase price of the furniture.
Default and Repossession
If you fail to make your rental payments on time, the furniture store can repossess the furniture. However, Texas law provides certain protections for tenants in rent-to-own agreements. According to the Texas Property Code, a furniture store cannot repossess your furniture unless:
- You are in default
- The furniture store has given you notice of default and the opportunity to cure the default
- The furniture store has obtained a court order allowing repossession
If the furniture store repossesses your furniture without following these procedures, they may be liable for damages.
Conclusion
If you are considering renting to own furniture in Texas, it is essential to understand the laws surrounding rent-to-own agreements. Make sure you read and understand the terms of the agreement before signing anything. If you have any questions or concerns, it is always best to consult with an attorney who specializes in landlord-tenant law.