What is a lease purchase agreement?

A lease purchase agreement is a legal contract that outlines the terms of a rental agreement between a tenant and a landlord, with the added option for the tenant to purchase the property at the end of the lease. This type of agreement is common in residential real estate law in California. Under a lease purchase agreement, the tenant pays a rental fee on the property throughout the length of the lease, similar to a traditional rental agreement. The tenant also has the option of buying the property at the end of the lease if they choose. The tenant pays an additional option fee as part of the agreement that gives them the right to purchase the property. This fee can be applied to the purchase of the property at the end of the lease or refunded to the tenant if they choose not to buy the property. The landlord and tenant will also negotiate a purchase price in the agreement. If the tenant chooses to buy the property at the end of the lease, they can purchase the property at the agreed-upon price. If the tenant decides not to buy the property, the landlord keeps the option fee and the tenant is free to move out of the property at the end of the lease. Lease purchase agreements are an advantageous option for tenants looking to purchase a home but are in the process of accumulating funds for a down payment or working on their credit score. It also gives the landlord some assurance that the tenant is serious about potentially purchasing the property.

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What is a lease purchase agreement?

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