What is a lease with an option to buy?

A lease with an option to buy is a contractual agreement between a tenant and a landlord, specific to Massachusetts property law. Under this type of agreement, the tenant has the option to purchase the property at a predetermined price and timeline. Generally, the tenant pays a nonrefundable option fee to the landlord that is applied to the purchase price if the tenant decides to exercise the option to buy. The tenant is required to pay a regular lease payment to the landlord during the lease, which cannot be applied to the purchase price. The tenant is also responsible for taking care of the property and maintaining it in good condition. In Massachusetts, a lease with an option to buy agreement may also include a rent-credit clause, where a portion of each payment made by the tenant is applied to the purchase price. If the tenant chooses to exercise their option to buy, the rent-credit payments are deducted from the purchase price. In this instance, the landlord must provide a written disclosure of the rent-credit agreement to the tenant. A lease with an option to buy agreement is advantageous for the tenant as it gives them time to save up the money needed to purchase the property. It also allows the tenant to move out of the property if they decide not to purchase it. However, if the tenant does not exercise the option to purchase the property, the landlord may keep the option fee. Therefore, it is important for tenants to read and understand their lease with an option to buy agreement before signing.

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What is a lease with an option to buy?

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