What is the difference between a lease with option to purchase and an option to purchase?

The difference between a lease with option to purchase and an option to purchase is an important distinction in residential real estate law in Virginia. A lease with option to purchase is a contract between a tenant and a landlord in which the tenant agrees to lease the property for a specified amount of time and also agrees to purchase the property during or at the end of the lease period. An option to purchase, on the other hand, is a contract in which the tenant is given the option to purchase the property but without the obligation to do so. A lease with option to purchase generally requires the tenant to pay a premium or additional fee in addition to the rent. The premium gives the tenant the right to purchase the property during the lease term. If the tenant chooses not to purchase the property, they will still have to pay the rent for the remainder of the lease period. In some cases, the tenant can use the premium as a down payment towards the purchase of the property. An option to purchase does not require the tenant to pay an additional fee, and the tenant is not obligated to purchase the property if they choose not to. However, if the tenant does decide to purchase the property, they must still do so within the time frame specified in the option agreement. Since the tenant does not have to pay an additional fee or obligation to purchase, the option to purchase is usually a more favorable option for the tenant when compared to a lease with option to purchase.

Related FAQs

What is the difference between a realtor and a real estate agent?
What is foreclosure by judicial sale?
What is a deed in lieu of foreclosure?
What is a lease purchase agreement?
What do I need to know about landlord-tenant laws?
What is the difference between an affidavit of title and a title commitment?
What are closing costs?
What are escrow instructions?
How do I obtain financing for a real estate transaction?
What is a Notice to Quit?

What is the difference between a lease with option to purchase and an option to purchase?

Related FAQs

Related Blog Posts