The Maine Legislature recently passed a bill that focuses on adding certain protections and requirements regarding option contracts to purchase real estate or lease with option to purchase real estate.
Among other provisions, the new bill creates certain requirements for contracts, listing the elements that must be included in such a written contract (for example, that in the event that the option contract is not exercised, the owner of the property must return any initial payment from the start of the option contract that exceeded certain amounts specified in the law). The bill also includes certain registration requirements after the option agreement for the purchase of real estate or real estate for hire-purchase has been signed by both parties, and requirements for the termination of such contract, defining when the process of eviction or foreclosure is applicable for such provisions.
The bill further states that the owner of the property that is the subject of the purchase option contract, or lease-to-own agreement, is considered a “creditor” under the credit code. Maine consumer price, although there is an exemption for owners with a low volume of transactions.
In addition, the bill adds provisions regarding prohibited acts related to installment land contracts (including limitations on surviving foreclosure obligations) and mediation arrangements related to certain foreclosure proceedings.
The bill will come into force on October 18, 2021.