Laws are inevitably something we all deal with in nearly every aspect of our daily lives. Some are to protect us, while others are simply a means for control and regulation. Though rent-to-own agreements are accepted in most states, there are still a couple that don’t currently have the correct legislature in place to safely approve of such arrangements. 

If you’re wanting to rent-to-own a home, shy away from these states to make your life a little easier.

Here are the four states in the US that restrict rent-to-own actions:

New Jersey

Tucked between Delaware and New York, you’ll find the northeastern state of New Jersey. Famed for its beautiful beaches, excellent food, and a diverse culture, New Jersey is a seemingly great place to settle down and plant some roots along the Atlantic – if you can afford it that is! New Jersey is not only one of the smallest states in the country, but also one of the most expensive states. A quick online search will bring up a whole host of rent-to-own listings, which may seem contradictory, but there is a reason New Jersey is on this list! Even though you can find rent-to-own options here, it wouldn’t be the safest option. A majority of the states in the US have laws that protect both the sellers and buyers from the very beginning of the agreement. New Jersey has fewer laws and clause requirements to abide by, making it easier for scammers to slip through the cracks.

North Carolina

North Carolina has great cities with lively diversity and has made a couple other lists here. While you can certainly rent-to-own a home in North Carolina, the state doesn’t make it easy. In the Tar Heel State, rent-to-own actions are governed solely by the North Carolina General Statute. This means your real estate broker cannot construct or draft a rent-option or rent-purchase agreement by themselves. Any rent-to-own actions need to go through the state regulated system which could take more of your time and money. It’s worthy to note, however, that because of these stricter rules, it does make agreements safer for both the buyer and seller in the long run.


Home of attractive areas such as Wisconsin Dells, Lake Geneva, and Door County, Wisconsin is an all around good midwestern state to call home. Unfortunately, in the rent-to-own realm, it’s another hotspot for scammers and predatory loans. Due to the lack of legislation and regulations, the rent-to-own industry is having growing pains. Sellers who are wanting to offer a rent-to-own option can just go online and print out a short 3-page agreement template that would be sufficient in the state of Wisconsin. The ease of the process may seem like a good thing, but it could leave room for a lot of important topics to not be discussed and could lead to disagreements and legal heartache down the road.


As an honorable mention, we’ve got good old Minnesota. Minnesota is known for its friendly residents and harsh winters that residents somehow bear with a smile and chipper, “hey, there buddy!” If you like the cold Midwest, maybe you have considered this state as a possible spot for your rent-to-own aspirations. Like the rest of the states on this list, you surely can find rent to own options here, but it comes with a catch. Minnesota does have rent-to-own legislation, but the government has made it a highly unappealing option. The Minnesota Supreme Court has confirmed that rent-to-own agreements are also a credit sale, and therefore, limited to an 8 percent annual rate of interest. With this insane interest rate, it makes the rent-to-own route seem pretty much obsolete to traditional home purchase actions.


So, with that rundown, you’d most likely be better off choosing any other state. Rent-to-own agreements can be very complex, and it’s extremely important to be thorough and get it done correctly. Being educated and aware of some of the dangers, will help you better prepare for your life as a future homeowner.

Additional Resources

RTO Laws

North Carolina RTO