Maine to Regulate Option Contracts for the Purchase of Real Estate or Real Estate for Rent | Weiner Brodsky Kider PC
The Maine legislature recently passed a bill that emphasizes adding certain protections and requirements regarding option contracts for the purchase of real estate or leasing 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 upfront payment from the start of the option contract that exceeded certain amounts specified by law). The bill also includes certain registration requirements after signing the option contract for the purchase of real estate or rental real estate with option to purchase by both parties, and requirements for the termination of such a contract, defining when the process of eviction or seizure is applicable to these provisions.
The bill further specifies that the owner of the property that is the subject of the purchase option contract, or the rental contract with option to purchase, is considered a “creditor” under the Credit Code. Maine consumption, although there is an exemption for homeowners with a low volume of transactions.
In addition, the bill adds provisions concerning prohibited acts related to land deposit contracts (including limitations on obligations in the event of foreclosure) and mediation procedures related to certain foreclosure proceedings.
The bill will come into force on October 18, 2021.