Rent to own: A landlord’s responsibility

What is your responsibility as a landlord with the rent-to-own model? This model is the ultimate exit strategy for you as a landlord if you’re looking to sell your property. If you find a tenant who wants to buy your property, you can charge them a premium rental fee and an option fee upfront. In return, they’ll look after the property as if it were their own. This is a dream for you, as the landlord, because you are guaranteed a sale at the end of the term. 

Many landlords, however, believe that because the tenant intends to buy the property, their statutory duties no longer apply. This is not the case, however. You’ll remain the owner of the property and the legal landlord until the final deed is signed and the sale is complete. Here, we’ll take a closer look at what a landlord’s responsibility is with a rent-to-own model. 

Lease vs. option

In order to understand your responsibilities as a landlord, you’ll need to have a clear understanding of the paperwork involved. There will almost always be two separate legal entities with a rent-to-own model. For example: 

1. The Lease: A standard tenancy agreement that governs the occupation.
2. The Option: A contract giving the tenant the right to buy the property at a set price within a certain timeframe.

The important thing to remember is that the Option agreement doesn’t override the Lease,  even if your contract states that the tenant is responsible for all repairs and maintenance due to being the future owner. 

Under Section 11 of the Landlord and Tenant Act 1985, it is your duty as the landlord to maintain the structure and essential services of the property. You are not able to ignore your legal duties and neglect the general function of the property. 

Statutory compliance

When it comes to a landlord’s responsibility for the rent-to-own model, it is important to keep the Renters Rights Act. The act has fundamentally changed the private rented sector, and you need to comply with the following non-negotiables: 

The Decent Homes Standard

The Decent Homes Standard is now something all private rentals need to comply with. This means that your tenant/future buyer can’t live in a home with category 1 hazards, such as extreme cold or damp, even if they have agreed to buy the property. 

The end of fixed terms

As of May 2026, all new tenancies will become ‘periodic’ from the time the tenancy agreement starts. So, you need to ensure that your Option Agreement is robust, while the underlying tenancy is a rolling monthly contract. 

Mandatory safety certifications

You’ll need to be able to provide and maintain the following safety certificates: 

• Annual Gas Safety Certificates (CP12): Failure to do this is a criminal offence.
• EICR (Electrical Safety): Must be inspected every five years.
• Smoke & Carbon Monoxide Alarms: Must be tested and functional at the start of the tenancy.

If you do not provide this at the beginning of a tenancy, you may find it impossible to evict the tenant if the deal falls through.  

Finances and legal risks

If your agreement is not set up properly, you’ll be under scrutiny from the Financial Conduct Authority (FCA). If your agreement looks more like a high-interest loan or a distressed-debt solution compared to a proper lease option, you may face intervention from the Financial Ombudsman. 

The Court of Appeal has confirmed that landlords don’t need to mitigate loss by finding a new tenant if a lease is still active (treating rent as a debt); this is not valid if you terminate the lease in order to sue for damages. If the tenant pulls out from the rent-to-own model, your responsibility as a landlord is not to sue for future rent. 

Mortgage and insurance

A buy-to-let (BTL) mortgage is the most common one; however, many BTL lenders will specifically prohibit the Options Agreement because it is viewed as the tenant having a legal claim to the property. 

Also, if you sign a rent-to-own deal without consent to let, you may be in breach of your mortgage conditions. This is specifically the case for a lease option. There may be cases where the lender will be able to withdraw the loan and demand full repayment. 

Similarly, landlord insurance policies will require that the property be let on a standard tenancy, and if your insurer discovers that the tenant has the right to buy, they may void your policy. So, always keep this in mind when looking into a rent-to-own model. 

Management 

The biggest practical rent-to-own landlord responsibility is property management. Tenants may feel as though they have the right to renovate and change the property because they are the owners. This, however, can cause issues if the tenant does so without building regs. Also, if the sale falls through, you’ll be left with a property that is structurally compromised and unable to rent out to the next tenant. 

Always make sure that you regularly inspect your property to ensure it is being maintained according to the Descent Homes Standard. 

The landlord’s checklist

Your responsibility as a landlord when pursuing a rent-to-own strategy should be the following: 

• Separate the contracts: Make sure that your Option Agreement and your lease are distinct but still cross-referenced. 
• Validate repairs: Inform your tenants that structural repairs remain your responsibility as the landlord with a rent-to-own agreement under Section 11. 
• Lender approval: Always get written consent from your mortgage provider for a Lease Option. 
• Landlord insurance review: Make sure your landlord insurance policy covers rent-to-own/lease-option arrangements.
• 2026 compliance: Make sure you register your property on the Private Rented Sector Database and join the Landlord Ombudsman.

Always remember that you are a landlord first and a seller second, and that the legal burden, therefore, will always land on you for repairs until the day the funds land in your solicitor’s account and you no longer have the keys.

So, you may be looking for landlord insurance to help protect your rental property. Get in touch with our team of specialists at CIA Landlords to get your tailored quote on 01788 818 670. Also, be sure to visit our advice centre for more information on how to manage your rental property.