I'm not sure if it is the same everywhere, but when we looked into doing a 'rent to own', the way it worked was that we would pay rent for a specific amount of time and a certain portion of our rent would go toward the purchase of the home. In the meantime, the person we were renting from still owned the house and was still responsible for all taxes & property insurance (we had renter's insurance for our stuff). Then, once we'd paid out a specific amount toward the purchase price (3/4, I think), we owned the house and all of our rent became mortgage payments in full with full responsibility for taxes & property insurance. If for any reason we were not able to make purchase of the house, then we basically lost anything we'd already paid out.
We didn't end up renting the place b/c I unexpectedly inherited my grandfather's house, so I can't give you any more details or tell you how it worked out.
at 1:31 PM on Aug. 20, 2009