When an East Side woman learned she could enter into a land contract – or a lease-to-own agreement – instead of renting, she thought it would leave more money in her pocket.
“Before I got into this home, I was paying close to $700 just for a three-bedroom house,” she said. “When you have a program that comes in and says, ‘Hey, rent to own, $200 a month, $300 a month,’ you think half of that money goes to food.”
The Lincoln Knolls neighborhood home was vacant for two years, and she learned she had to bring the house up to code in order to pass inspections to receive utilities. The home lacked a hot water tank, copper piping in the basement appeared to have been stolen, and there were electricity problems.
Vision Property Management, a South Carolina company, purchased the home for about $5,000. It then offered the woman, who asked to remain anonymous because she worries the company will evict her, a $29,000 land contract. With interest and other costs, she will spend nearly three times that amount by the time she completes her 20-year contract.
The home’s market value is less than $10,000.
The Vindicator spoke to her and two others who entered into land contracts with Vision Property Management.
The Youngstown Neighborhood Development Corp. and the Alliance for Congregational Transformation Influencing Our Neighborhoods plan to take a bus to Columbia, S.C., on Saturday to bill the company for demolitions and other costs associated with the company’s properties in Youngstown.
Vision markets land contracts, also known as rent-to-own or lease-to-own agreements, to prospective buyers who don’t qualify for home-mortgage loans, local officials say. Those buyers then assume the responsibility for maintenance and staying in compliance with city housing codes.
Vision still holds the deed, so if the buyer under the contract defaults on a payment, Vision keeps the money collected and the home.
Ian Beniston, YNDC executive director, said the bill for demolitions, grass cutting and other maintenance is in the tens of thousands of dollars. It’s difficult to determine an exact figure because the 30 or so properties Vision limited liability corporations own in the city frequently change hands, he said.
The company’s tactics have garnered media attention in outlets including The New York Times and landed it in court.
Wisconsin recently sued Vision in an attempt to forbid it from doing business in the state.
The lawsuit describes a “false, misleading and deceptive business scheme to induce Wisconsin consumers to lease, rent or purchase uninhabitable properties to their economic detriment.”
Fannie Mae, the government-backed mortgage giant, stopped selling foreclosed properties to Vision last year. To read the full story from The Vindicator, click here.
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