The periodic payment required to rent the property usually seems low. Rent-to-own transactions are more expensive than they appear on the surface. "Renter" means a consumer who rents personal property from a rent-to-own business. "Personal property" or "property" means an item such as a washer, dryer, television or VCR that is used by a renter for personal, family or household purposes. In this Legal Guide, "lessor" means a rent-to-own business that rents or offers to rent personal property to a renter under a rent-to-own agreement. Part 2 of this Legal Guide discusses resolving issues that may arise in RTO transactions, such as the renter's liability for damaged or stolen rental property, limits on the lessor's repossession and collection activities, and the lessor's and the renter's legal remedies. This part also discusses RTO contracts, the lessor's and your duties in the RTO transaction, your rights to reinstate the RTO contract if you default, and your options for purchasing the rental property. Part 1 of this Legal Guide explains RTO transactions and what you (the renter) need to understand before you sign an RTO contract. The renter normally can reinstate the contract by paying past-due payments and properly-imposed late fees. If the renter promptly returns the property to the lessor undamaged, the renter is not liable for any other payments under the contract (but is liable for any past-due payments and lawful unpaid fees). If the renter does not make the next periodic payment when it is due, the RTO contract ends. If the renter makes all of the periodic payments scheduled under the contract (for example, 78 weekly payments) or exercises the purchase option, the renter acquires ownership of the property. In order for the renter to continue to use the property, the renter must make the next periodic payment. In return for use of the property, the renter must pay a periodic (weekly or monthly) payment to the lessor. The rent-to-own ("RTO") contract between the lessor and the renter allows the renter to use the personal property. The lessor owns the property unless and until the renter purchases it by one of the methods described in this Legal Guide. In a rent-to-own transaction, a lessor rents personal property, such as a television, to a renter for the renter's use. Rent-to-Own Transactions in California: Legal Guide S-10
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