Lease with Option to Purchase Form

A lease with option to purchase is like a regular lease but it gives the lessee the right to purchase the property at some time before all of the lease payments have been made. It is a combination of real estate rental, sales and finance technique. The seller agrees to give the buyer the exclusive right to purchase the property. The buyer is given the right, but not the obligation.

The price of the property is usually agreed upon by the tenant/buyer and the landlord/seller at the onset of the agreement. The duration of the lese is usually 12 or 24 months. The tenant/buyer gives a deposit (which is non-refundable) and this amount is applied to the contract price of the property. Monthly payments are made by the tenant/buyer and a portion of this is considered as rent for the use of the property and the rest is considered as an installment payment for the property to be purchased. At the expiry of the lease, the tenant/buyer has the option to buy the property based on the conditions agreed upon at the beginning of the contract.

Buyers find lease with option to purchase as an ideal option because little up-front cash is required. The tenant/buyer can also try out the property before actually buying it. Aside from this, the property will also most probably increase in market value as the contract expires indicating a good investment on the part of the tenant/buyer.

Advantages for the landlord/seller is that with the strong demand for lease-option properties there will always be somebody who will be renting his property. The non-refundable consideration for the option is a huge amount, typically thousands of dollars. Plus the landlord could demand for a high price for his/her property because of the strong demand for lease-option properties.

Furthermore, the landlord/seller will almost always get top quality tenant/buyers since the latter will take good care of the property as if they own it.

Purchase an Offer to Purchase Form