Tips on Buying Cars: lease to purchase agreement, rose mcclendon, adequate insurance coverage

Question
We found a buyer for my 76 year old aunt's RV who wants to take over the payments for 2 years until his tax issues are settled then buy the RV outright. We've know them for 14 years and trust them but this is business and I want to make sure she's covered. I drafted the agreement below. Please let me know of any suggestions/recommendations you may have. Thanks

10/6/2008

  
LEASE TO PURCHASE AGREEMENT

  The following is a lease to purchase agreement between Rose McClendon and Asbury and Gloria Daniel. This agreement states that Asbury and Gloria Daniel agree to take possession of the 2003 Newmar Mountain Aire M-3778-WRKHRS Motor Home VIN#                                  owned by Rose McClendon on a lease with intent to purchase basis. Upon taking possession of this vehicle Asbury and Gloria Daniel agree to accept all the terms of the current loan agreement between Rose McClendon and Thor Credit Corporation. Asbury and Gloria Daniel agree to assume the monthly loan payments of $720.29 payable to Thor Credit Corporation and to pay that amount directly to Rose McClendon by the 10th day of each month. In the event that Asbury and Gloria Daniel fail to pay the total amount prior to the 15th day of each month Rose McClendon reserves the right to reclaim the vehicle and void this agreement. Upon Asbury and Gloria Daniel taking possession of the vehicle Rose McClendon will be no longer liable for any costs associated with the vehicle or any damages to the vehicle. Asbury and Gloria Daniel agree to maintain adequate insurance coverage on the vehicle at all times and to accept full responsibility for any damages to the vehicle caused by themselves or any other individual.
  This agreement states that Asbury and Gloria Daniel agree that upon taking possession of the 2003 Newmar Mountain Aire M-3778-WRKHRS Rose McClendon will no longer have any responsibility regarding the upkeep and maintenance duties and responsibilities and subsequent costs associated with this vehicle and that Asbury and Gloria Daniel agree to assume all costs associated with any upkeep, repairs and maintenance duties and responsibilities needed for this vehicle. Asbury and Gloria Daniel also agree to accept total responsibility for any fees associated with the annual tag renewal for the 2003 Newmar Mountain Aire M-3778-WRKHRS.
  The terms of this agreement state that Asbury and Gloria Daniel will lease the 2003 Newmar Mountain Aire M-3778-WRKHRS from Rose McClendon for a period of twenty-four (24) months to begin October 6, 2008 and run through October 6, 2010. Within thirty (30) days prior to the expiration date of this lease agreement Asbury and Gloria Daniel agree to secure personal financing for the purpose of purchasing this vehicle from Rose McClendon. At that time Asbury and Gloria Daniel agree to purchase this vehicle from Rose McClendon outright for a purchase price equal to or greater than the current total loan payoff amount at that time and to make full payment of that amount directly to Rose McClendon or her representative in the form of a cashiers check.  
  This agreement states that in the event of Rose McClendon’s untimely death within the twenty four (24) month lease period the above mentioned vehicle will automatically become part of her estate. In this event the administrator of her estate as well as her surviving children and beneficiaries agree to continue to honor the terms of this agreement.


Answer
Harold,

The agreement sounds fine.  Just understand that this is not a legal document when it comes to the lender and any suit that you may enter into with that regards.  You need to make sure that this is legal in your state.  In most states it is illegal to sub-lease a vehicle that you have a loan on.  Most people still do it, and the lenders hardly ever proceed with anything in the event that they find out.  Most lenders just want to get paid there money, and they don't care what happens as long as they are getting paid on time.  But other than that, it sounds fine.  I just want you to understand this going into this agreement.  Also, in the even of here untimely death, make sure that ALL of here beneficiaries and children sign this lease.  It would be very nasty if one beneficiary or child does not agree to this and then you have to go to court, and techincally this agreement would be void, and the then Daniels could sue the estate.  It would not be pretty.

Hope this helps.

Thanks - JB