The lease-purchase agreement is a lease agreement with an option to purchase. This is a real estate contract that allows you to acquire property progressively while occupying it as a tenant, the time of a rental lease contract. At the end of it, and after a few payments of rent specified upstream, the occupant becomes the owner of the property. How it works ?
A purchase as a “renter-accésant”
In a rental-homeownership contract, the first-time homebuyer occupies his home as a “renter-accésant”. As such, he must pay a sum consisting of rent, or an occupancy allowance, plus a supplement that takes the form of savings. This then acts as a personal contribution when the exercise of its purchase option. A lease-purchase agreement thus determines the period of time, which ranges from 1 to 5 years, which the renter-buyer has to raise his option to buy the property. Following an agreement previously established between the two parties, via an amicable agreement or an amendment to the contract, this period may be extended or shortened. The signature of this contract must be made in the presence of a notary and must necessarily mention the selling price of the property, payment terms, the date of entry into the rental period, guarantees, the amount of the fee , as well as charges that are incumbent on the renter-guest.
During the rental period, the renter-guest is required to take charge of the routine maintenance of the property. But important work and major repairs are the owner’s responsibility. In the case of a co-ownership, the tenant-first-time buyer acts as owner to participate in the deliberations of the co-ownership. He is therefore liable for all the expenses of maintenance and repair of the property in proportion to his share. Nevertheless, only the seller remains the guarantor of the payment of the charges with the co-ownership throughout the duration of the contract. In case of default of the tenant-accessor, the trustee can therefore turn against him. The renter-accésant is also held as owner of the housing by the Treasury. As such, he is responsible for paying the property tax.
Invest in rental real estate in Mauritius
The acquisition of real estate under the PDS regime in Mauritius allows you to put your home for rental. You leave a rental investment to end up giving up your property at the end of a lease agreement. The renter-buyer can then occupy the property for 1 to 5 years, while paying you a rental allowance, and a supplement of savings for the purchase of housing. An investment that can bring you a significant additional source of income. In addition, the purchase of a luxury villa in Mauritius allows you to obtain a Permit Occupation, while enjoying a very flexible taxation. In fact, for a purchase of over $ 500,000, you are exempt from all types of taxes in Mauritius, with the exception of income tax, set at 15%.
Transfer of ownership
The seller is obliged to inform the renter-buyer to lift the purchase option, via a registered letter with acknowledgment of receipt, three months before the end of the contract. Once the call option has been exercised, both parties will sign a definitive deed of sale. As a result, the renter-buyer becomes the owner of the property and agrees to pay the full selling price to obtain the transfer of ownership. The amount of this balance usually corresponds to the difference between the sale price and the total amount of savings paid to the seller during the rental period. Of course, the transfer of ownership depends essentially on the obtaining of a mortgage by the buyer. Conversely, the sale can not take place and the payment of compensation either. In the case where the lease is canceled, or if the option to purchase was not exercised at the end of the contract, the owner is required to repay the acquisitive fraction of the fee paid to the buyer within three months from his departure.
If the tenant renounces the purchase of the property, the seller may claim compensation equal to 1% of the agreed selling price. If, on the other hand, it is the seller who cancels the contract, the renter-purchaser is entitled to compensation amounting to 3% of the selling price.