Lease to Own Agreement Template

How to Structure a Lease to Own Agreement?

Here is how you should complete a Lease to Own Agreement:

1. Identify the parties to the contract - the individual or entity that owns the property in question and their counterpart that wishes to lease and then purchase the estate. You may only add the names and addresses of the parties, and it is up to you to write down more details such as driver's license numbers.
2. Outline the lease portion of the deal. Just like in any other Lease Agreement, you need to describe the property, negotiate the amount of the rent (usually paid on the first day of each month), the term of the lease (not more than two or three years), and the security deposit to safeguard the property and the interests of the current owner. If the property comes with furniture and appliances, list them in the agreement or the separate document - the future tenant must check their condition before signing the papers and agreeing to accept the items in their present state. Determine which party will pay for the utilities and services, and who is responsible for the maintenance and routine repairs of the house or office space.
3. State the sale and purchase terms. Confirm the tenant becomes the legal owner of the property once they have made enough lease payments and/or paid an additional sum of money considered to be a purchase price. Typically, the parties agree to keep the value of the estate the same despite inevitable changes in the housing market.
4. Negotiate the potential termination of the agreement. If the tenant decides not to exercise their right to purchase property at the end of the lease, the contract should be flexible enough to allow them to convert it into a traditional lease agreement - or they may move out so that the landlord starts looking for another renter who will be willing to buy their property.
5. Confirm you agree to all terms and conditions of the agreement, sign and date the document. Since this contract involves substantial sums of money, you may think about notarization to add an extra level of protection to your deal.

Check out these property-related topics:

• Cohabitation Agreement;
• Co-Tenancy Agreement;
• Real Estate Purchase Agreement.