Lease Options – Lease Purchase Sales
Lease option sales were popular financing instruments in the late 1970s and early 1980s. They were primarily used as a way to circumvent alienation clauses in mortgages. Proponents claimed the sale was not really a sale because it was a lease; however, courts argued otherwise. Today, options to purchase, lease options and lease purchase agreements are three different financing documents. The variances are state specific and not all states have identical laws. Before entering into an agreement with a seller, buyers should obtain the advice of a real estate lawyer. The information below is an overview and is not meant to be construed as legal advice. Basics of an Option • Buyer pays the seller option money for the right to later purchase the property. This option money may be substantial or as little as $1. • Buyer and seller may agree to a purchase price now or the buyer may agree to pay
