What is a lease purchase agreement?

A lease purchase agreement is a type of residential real estate law that is practiced in Iowa and other states. It is a hybrid between the traditional lease and a purchase agreement, offering the tenant or buyer the option to purchase the property after leasing it. When entering into a lease purchase agreement, the tenant pays the landlord a portion of the purchase price as a security deposit. This money is usually held in an escrow account, and then applied to the purchase price if the tenant follows through and purchases the property. The tenant is also responsible for paying rent to the landlord during the lease period. The length of the lease purchase agreement can vary, but most agreements last from one to three years. During the lease period, the tenant has the right to live in the property and maintain it. The tenant also has the right to make improvements, such as painting or landscaping the property. At the end of the lease period, the tenant can either purchase the property or move on. If the tenant chooses to purchase the property, the landlord may agree to apply all or some of the rent payments to the purchase price. If the tenant cannot purchase the property, the lease purchase agreement ends and the landlord can keep the security deposit.

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What is a lease purchase agreement?

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