Lease Agreement with Option to Purchase Examples

Introduction to Lease Agreement with Option to Purchase

A Lease Agreement with Option to Purchase combines two distinct agreements: a lease and an option to buy. This arrangement allows a tenant to lease a property while retaining the right to purchase it at a later date. This can be beneficial for both landlords looking to secure tenants and tenants who may wish to buy a property in the future. Below are three diverse, practical examples that illustrate how this type of agreement can be structured.

Example 1: Residential Lease Agreement with Option to Purchase

This example is tailored for a single-family home rented to a family. The lease allows them to purchase the property after a specified period.

In this scenario, a family is renting a home in a suburban neighborhood. They are interested in buying the property but want to ensure they are happy living there first. The landlord agrees to a lease with an option to purchase.

The lease is set for 12 months at a monthly rate of \(1,500, with a purchase option price of \)300,000. The agreement states that the family can purchase the property anytime during the lease term, and a portion of their monthly rent ($200) will be credited toward the purchase price if they choose to buy.

Relevant Notes:

• The option fee, which could be a one-time payment, should also be specified. For instance, $5,000 may be paid upfront to secure the purchase option.
• It’s important to outline what happens if the family decides not to purchase at the end of the lease.

Example 2: Commercial Lease Agreement with Option to Purchase

This example is designed for a small business looking to lease retail space with the intent to purchase the property.

A local coffee shop is renting a retail space in a busy shopping district. The owner anticipates growth and wants the opportunity to purchase the space in three years, should the business flourish. The landlord agrees to a 36-month lease at a rent of \(2,000 per month, with an option to purchase the property for \)500,000 at any time before the lease expires.

The agreement stipulates that 10% of the monthly rent ($200) will be deducted from the purchase price if the coffee shop owner exercises the option to buy. The lease also includes a clause for renewal after three years, should the owner decide not to purchase immediately.

Relevant Notes:

• The commercial lease should also address maintenance responsibilities and any modifications the tenant may wish to make.
• Consideration for zoning laws and permits may be necessary, as these can affect the ability to operate the business or purchase the property.

Example 3: Lease Agreement with Option to Purchase for a Multi-Family Unit

This example is for an investor looking to acquire a multi-family property. The lease is structured to allow the investor to assess the property before making a purchase.

An investor has identified a multi-family building with four units in an urban area. The current owner agrees to a two-year lease at \(4,000 per month, with an option to purchase the building for \)800,000. The lease includes a provision that allows the investor to conduct renovations during the lease term, provided the owner is notified in advance.

If the investor decides to purchase the property, \(300 per month will be credited toward the purchase price, totaling \)7,200 by the end of the lease. The option must be exercised at least three months before the lease expiration date.

Relevant Notes:

• The lease should specify the rights and obligations regarding property management, especially since it involves multiple tenants.
• It may be beneficial to include clauses addressing potential rent increases or changes in property value during the lease term.