Commercial Lease Purchase Agreement

Air Real Estate Association Option to purchase a standard lease supplement dated by and between landlords (leasing) address of premises: paragraph (a) The owner hereafter grants a leasing option for the purchase of the premises on the terms… Leasing contracts are not for everyone. Since the successful conclusion of the agreement and sale requires financing through a traditional route, individuals whose circumstances do not permit them to obtain a mortgage should abstain from any fixed-account contract. At the end of the rental period, the tenant/buyer has the opportunity to purchase the house. The lump sum and rental credit from the original deposit will only be released to the buyer in the form of a down payment on the house, if the tenant/buyer decides to buy it. The tenant/buyer is responsible for guaranteeing the mortgage required to complete the purchase of the house. If the tenant/buyer cannot purchase the house due to lack of financing, tenants and landlords may agree to extend the option period, convert the tenancy agreement into a traditional tenancy agreement or terminate the contract with the tenant and landlord looking for other tenants or buyers. [4] As is the case in the lease, the option fees and accumulated rental credit are not refundable if the tenant/buyer decides to leave at the end of the tenancy agreement. The tenant/buyer is exempt from the responsibility of the sale and the owner/seller is responsible for finding new tenants. Lease agreements give buyers who cannot immediately obtain a mortgage (much less you pay the cash price of a property) the opportunity to move in as a tenant and later become the owner of the property. Today, options for purchase, option leasing and leasing contracts are three separate financing documents. Although they are similar, they differ in finer details because the differences are state-specific and not all states have identical laws.

Talk to a real estate lawyer before entering into one of these agreements with a seller to make sure you understand the effects. Others, cautious about the fair interests that can arise when a tenant is distributed after payment of rental credits, warn against using words such as “credit,” “seller” and “buyer” in the lease itself. You should also know the difference between the agreed price and the market price.

— bella.mark