The Lease Purchase Agreement: Try before you buy!
There is a perfect solution for situations in which a buyer wants to try a property out before purchasing. A Lease Purchase Agreement aims to simplify the process of selling or buying a residential or commercial property. Let’s see how it works.
Who needs a Lease Purchase Agreement?
A landlord (leasing a property with future sale prospects) and a tenant (who wants to rent a property with the intention to buy it) can enter into a Lease Purchase Agreement. According to this type of lease agreement the parties are defined as the Landlord/Seller and the Tenant/Buyer.
What is the Lease Purchase Agreement for?
A Lease to Purchase Option Agreement guarantees the Tenant’s right to purchase a property, restricting the Landlord from selling it to a third party. The Agreement also assures the Landlord that the property will eventually be bought.
The Agreement establishes the terms and amount of a possible purchase.The possibility of buying the property can be maintained throughout the duration of the contract or for a particular time interval. The tenant can gain credit towards the purchase price with each on-time rental payment.
Is the Lease to Purchase Option Agreement accompanied by other forms?
The Lease Option Agreement is designed to be filled out as an accompaniment to a Residential Lease Agreement, which is the primary contract recording and regulating the conditions and terms of a property lease.
When is the Lease to Purchase Option Agreement due?
The period of validity of a Lease Purchase Agreement, as agreed by the Landlord and the Tenant, is indicated on this form.
How do I fill out the Lease Purchase Agreement?
To correctly fill out the contract, the following must be agreed upon and defined:
– Parties to the agreement
– Property meant for purchase/sale
– Term of Option
– Option Consideration
– Purchase price
– Choice of law and venue
The Lease to Purchase Option Agreement, like the primary lease contract, must be signed and dated by the Parties to the deal.
Where do I send the Lease To Purchase Option Agreement?
There is no need to send the Lease Option Agreement form anywhere. However, both parties must make sure they retain copies of the document. Also, one copy should be kept by the broker acting as an agent to the transaction.