Lease Option Agreement

A Lease Option Agreement is a legal contract that combines a rental lease with an option to purchase the property. Key features include:

1. Tenant rents the property for a specified period

2. Tenant has the exclusive right to buy the property during the lease term

3. Purchase price is typically agreed upon in advance

4. Option fee paid upfront (often non-refundable)

5. Part of the rent may be applied towards the purchase price

6. Specific timeframe for exercising the option

This agreement benefits both parties:

– Tenants can “test drive” the property before buying

– Landlords receive income while maintaining the possibility of a sale

It’s particularly useful for those who want to buy but need time to improve credit or save for a down payment. The agreement should clearly state all terms, including option price, duration, and how rent credits (if any) will be applied. Both parties should seek legal advice to ensure their interests are protected in this complex arrangement.